Cost of living: People across Europe to miss bill payments amid rising inflation - how does the UK compare?

People across Europe expect to miss bill payments in the coming 12 months as rising inflation tightens its grip on household finance, a new report has found.

Rising costs have set off a wave of "bill anxiety" as households struggle to balance their income and expenditure.

It comes as energy and food costs tipped UK inflation to its highest level since 1981 - at 11.1%.

Intrum's annual European Consumer Payment Report (ECPR), surveyed 24,000 consumers across the continent about their financial situation and found more than eight in 10 are worried about the impact of rising grocery and energy prices on their financial well-being.

Six in ten of those surveyed said they are changing how they spend money, cutting back on meals out - which is bad news for a hospitality sector trying to find its feet again after the devastation of the COVID pandemic.

The latest on the cost of living

Younger consumers feel a particular impact on their social lives and are more likely to be using buy-now-pay-later schemes to cover the growing cost. Some 31% of Gen Z, who are in their late teens and early twenties, say they increasingly do this.

Among those expecting to miss bill payments in the next 12 months, most say they are likely to default on e-commerce and online store bills.

"After long years of low inflation and loose monetary policy, soaring prices and rising interest rates have made European consumers deeply pessimistic about the future," said Andrés Rubio, acting president and CEO of Intrum.

"Many consumers who were relatively unaffected during the pandemic are today feeling the impact. The cost shocks will naturally have a significant impact on consumers' spending patterns, with increased risks of default for lower priority bills."

More than half of the respondents expect inflation to carry on for years, suggesting little faith in their leaders' ability to bring prices under control. The economic uncertainties are also causing a majority, six in 10 of the respondents, to worry that they are not saving enough for the future and will not be able to retire comfortably.

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Three in 10 have said they will soon ask their employer for a pay rise - rising to 41% among those with young children.

"Although we have not yet seen the 'doom loop' of a wage-price spiral in Europe, the relatively high share saying they will demand a pay increase indicates that consumers' patience with the falling real wages is diminishing. This will put further spotlight on central banks' capacity to curb the inflation," said Mr Rubio.

How does the UK compare to Europe?

One in 10 Germans said they would be most likely to skip their rent payment if they had no choice but to miss a bill - just 7% of people in the UK said they would do this.

However, Brits are most likely to opt for missing a credit card payment, with 24% saying this would be the one they don't pay - followed by Germany (17%) and Spain (15%).

Some 23% in the UK would also be most likely to cut ba