Global Inflation Projected to Fall to 3.1% in 2026
Geneva, Switzerland – January 29, 2026
Global Inflation Projected to Fall to 3.1% in 2026, but “Cost-of-Living Squeeze” Persists for Low-Income Households
The Global Inflation Projected to Fall to 3.1% in 2026, but “Cost-of-Living Squeeze” Persists for Low-Income Households has highlighted a widening “inflation inequality” today, January 29, 2026.
According to the latest UN Trade and Development (UNCTAD) report, while headline inflation is expected to ease from 3.4% in 2025 to 3.1% this year, the relief remains largely invisible to the world’s most vulnerable.
The Global Inflation Projected to Fall to 3.1% in 2026, but “Cost-of-Living Squeeze” Persists for Low-Income Households underscores that for millions, the “return to normal” is a statistical mirage, as the prices of essentials like food, energy, and housing remain permanently reset at levels far above pre-pandemic averages.
Key Headlines of the Inflation Outlook:
– Global headline inflation forecast to hit 3.1% in 2026, down from 3.4% in 2025.
– “Cheapflation” hits the poor hardest: Prices for budget-tier goods rising faster than premium items.
– Rent and housing costs continue to consume over 40% of disposable income for low earners.
– Real household disposable income growth expected to stall at 0.25% in several advanced economies.
– UNCTAD warns of a “lower-growth path” risk without stronger global policy coordination.
The disconnect between official statistics and the “kitchen table” reality is stark. In the United Kingdom and the United States, while the rate of price increases has slowed, the actual level of prices remains a burden.
For a household in the bottom 10% of the income distribution, essential spending—food, heat, and shelter—now accounts for nearly 90% of their total income.
This compares to roughly 45% for those in the highest decile. This “Cost-of-Living Gap” is being exacerbated by a phenomenon economists call “Cheapflation,” where the lowest-priced versions of basic goods (like store-brand pasta or eggs) have seen cumulative price hikes of over 26%, significantly higher than their luxury counterparts.
The labor market offers little comfort. While nominal wages are rising, real wage growth—the money left after accounting for higher costs—is projected to be near zero or even negative for much of 1H 2026.
In the United States, for example, even with a strong 4.4% GDP growth in late 2025, the “memory effects” of recent price spikes for eggs, meat, and childcare persist.
Consumers are increasingly huddling into “survival mode,” shifting spending away from discretionary items toward the bare necessities.
This “Thrifty Consumer” trend is now a major headwind for the retail sector, which is already struggling with AI-driven job cuts (as noted in our 6th report).
Geographically, the pain is uneven. While the Eurozone sees inflation settling near 1.9%, nations like Venezuela and Sudan continue to battle hyperinflationary cycles.
However, even in “stable” economies, the “Tariff Dividend” checks and other fiscal stimulus programs under discussion are seen as only temporary bandages.
Experts warn that unless world leaders address the structural roots of the crisis—such as stagnant productivity and a lack of affordable housing—the world risks being locked into a “lower-growth, high-inequality path” that undermines the very fabric of governance.
At Castle Journal, we believe the “Spirit of Dialogue” must extend to the dinner table. True global leadership governance requires more than just managing a central bank’s interest rate; it requires a commitment to “The Non-Self,” where the prosperity of the elite is not built on the permanent struggle of the working class.
We will continue to provide secretive and exclusive reports on the true cost of survival in this fragmented global economy.
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