According to the Bank of England’s latest biannual household survey, conducted with NMG Consulting from late August to mid-September, more than 70% of respondents reported encountering higher prices for items and services they normally buy.

But the wealth gap was evident. Rather than cutting into what they spend, those with higher incomes are choosing instead to put less into savings each month.

Lower-income households, on the other hand, are battling the rising cost of living by lowering how many goods and services they buy and by switching to cheaper alternatives.

Limited pay rises as a quarter dip into savings

While those with lower incomes found more affordable alternatives, or simply didn’t buy as much, more than half of the better-off households said they were spending more overall but were funneling less into their savings accounts.

Less than one-tenth of respondents said they’d had a pay rise that meant they could spend more, although about 25% said they were dipping into existing savings as well.

Very few respondents said they had lowered their mortgage or debt payments.

The BoE considers the extent to which people cut back as a clue to how much the UK economy is slowing. Consumer prices have risen by around 11% over the past year. Meanwhile, the bank increased its base rate by 0.75% to 3% in November, sending shockwaves through the mortgage markets.