Cost of Living Crisis Deepens: Why Everything Keeps Getting More Expensive

Government policies and regulations also exert a considerable influence on the cost of living. Fiscal policies, such as taxation and government spending, can directly and indirectly affect prices. Changes in tax rates can alter the disposable income of individuals and the operating costs of businesses, which can then influence pricing decisions. Monetary policies, primarily managed by central banks, aim to control the money supply and interest rates. Lowering interest rates can stimulate borrowing and spending, potentially leading to demand-pull inflation, while raising interest rates can help curb inflation but may also increase borrowing costs for consumers and businesses.