If prices rise and wages don't, who feels the pinch most?

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Updated: 11-Apr-2025

Lower and middle-income groups suffer most. When prices increase but wages stay flat, basic needs like food, transport, and rent become more expensive. This leads to reduced savings and financial stress. Inflation affects everyone, but it’s more painful for those with limited income or no assets.

High inflation without wage growth also reduces real wages, which means you earn the same but can buy less. That’s why policymakers watch inflation data closely and try to maintain balance using interest rates and fiscal tools.

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