Inflation is lower — so why do people still feel poorer?

24 April 2026

What’s happening

Many countries have seen inflation slow from the peaks of recent years. That sounds like relief.

But many households still feel under pressure, and in some cases more stretched than before.

This creates a disconnect between positive economic headlines and everyday experience.

Why it matters

Inflation slowing does not mean prices have gone back down. It usually means prices are still rising, just more slowly.

If groceries rose sharply over two years and now rise only a little, the higher base remains.

Households live on levels, not rates. They pay the actual price at the till, not the change in the percentage.

Where it gets messy

Several pressures can remain even after inflation cools.

Wages often lag behind earlier price increases. Rent and housing costs can stay elevated. Interest payments may remain high after rate hikes. Insurance, education and utilities may keep rising faster than headline inflation.

Many people also depleted savings during harder years. That means less buffer for normal shocks.

So even if inflation improves statistically, financial stress can remain real.

What to watch next

Watch wage growth relative to living costs, not inflation alone.

Watch housing affordability, debt servicing pressure and whether essential categories keep rising faster than averages.

Most of all, watch confidence and spending behaviour. People respond to how secure they feel, not just what the headline number says.