Occasional Paper: The Cost Crisis and Crime in Scotland
Within the context of the ongoing cost crisis, this occasional paper explores the relationship between macroeconomic performance and crime in Scotland.
This occasional paper explores the relationship between macroeconomic performance and crime. It first presents a summary of the academic literature on a range of economic variables and crime, specifically in relation to previous periods of economic downturn. Emergent themes from the literature are then further explored using the latest crime statistics to monitor trends during this current period of cost crisis.
The central focus of this first occasional paper is economic performance and crimes against property, including acquisitive crime. A second paper will follow the publication of the 2021/22 Scottish Crime and Justice Survey and will further consider violent crime and domestic abuse, in addition to revisiting the crime types identified in this paper.
There is an ongoing cost of living crisis in Scotland and the rest of the United Kingdom, which is characterised by higher energy costs, higher food and other household costs, and real term pay decreases. Cost pressures have been apparent since late 2021 and in October 2022 the inflation rate reached a 41-year high of 11.1%. It has now fallen to 6.7% (CPI, August, 2023), down from 10.1% in March. However, food and non-alcoholic beverage prices are rising at a fast rate (prices rose 17.4% over the year to June, 13.6% over the year to August). Analysis by the Resolution Foundation conducted in May 2023 argues that 'the food price shock is about to overtake the energy price shock as the biggest threat to family finances'. Polling shows that the cost of living crisis is high in the public consciousness and an issue of significant and continued concern. Inflation is expected to reduce over the course of 2023, however, lower inflation does not mean prices fall, rather prices increase less rapidly.
Furthermore, there will be ongoing, long-term consequences for those that have mortgages. According to the Bank of England, around a million households with a fixed-rate mortgage will see their monthly repayments go up by about £500 by the end of 2026. This means that the full effects of the Bank of England's interest rate rises have not yet been felt and that we are yet to see a dramatic rise in borrowing costs for homeowners and a resulting hit to their living standards. In addition, renters may also be impacted by landlords passing on these higher costs by pushing up rents at some of the fastest rates on record.
The paper is structured into two parts. Part One provides an overview of the existing evidence on how macroeconomic performance affects crime. Part Two summarises the latest position for those crime types evidenced to be impacted by economic performance, as identified in Part One.
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