Why inflation matters for you and the gospel
We’ve heard the term ‘inflation’ a lot over the past few years. But what is it, and why should Christians pay attention to it?
Ross Ellis-Butcher, Marketing Executive
4 min read
We believe that wise financial stewardship is part of our gospel witness. That means understanding how inflation works, how it affects us, and how we can respond with faith, wisdom, and generosity, even in uncertain times.
What is Inflation?
Put simply, inflation means that prices increase over time. This is a normal part of a growing economy. In small, steady amounts, inflation can be healthy. But when it accelerates, it impacts everything from your weekly shop to your church’s building plans.
To track this, the Office for National Statistics (ONS) measures inflation using a ‘Basket of Goods’ – that is, a collection of items representing typical household spending. By comparing prices month to month, they calculate the inflation rate, which shows how fast prices are rising.
Who Controls Inflation?
The Bank of England has the responsibility to keep inflation at around 2%. To do this, they use something called the base rate. Here’s how it works:
- When inflation is too high, the Bank increases the base rate. This makes borrowing (like loans and mortgages) more expensive and rewards saving. This encourages people to save rather than spend.
- When inflation is too low, the Bank lowers the rate to stimulate borrowing and spending, supporting economic growth.
At the time of writing this article, UK inflation is at 3.4%, higher than the Bank’s target. As a result, interest rates remain elevated to cool down spending and bring inflation closer to that 2% goal.
What Does Inflation Mean for Me?
- Rising Cost of Living
Inflation increases the cost of everyday essentials like food, transport, housing and energy. Households with tighter budgets are hit hardest because a larger proportion of their income goes on these basics.
- Devaluation of Money
As prices rise, the value of money falls. If your salary stays the same while inflation rises, you can afford to buy fewer things. Over time, your savings also go less far unless they’re earning interest above the inflation rate.
- Higher Mortgage Costs
To combat inflation, the Bank of England raises interest rates, making borrowing more expensive. Whether you’re taking out a new mortgage or your fixed-rate term is ending, you may face higher repayments. This can affect housing choices and financial planning for individuals and ministries alike.
- Erosion of Savings Value
If your savings earn interest below the inflation rate, they lose value in real terms. While some turn to assets like property or shares to preserve value, it’s wise to seek professional advice before making any major changes.
What Does This Mean for the Gospel?
Economic pressure impacts how we live, give, and serve. But it also offers a fresh opportunity to demonstrate gospel-shaped attitudes and trust.
- Pressure on Generosity
When household budgets tighten, giving can be one of the first things to suffer. Yet churches, charities, and gospel workers often depend on consistent support. Reduced giving can limit ministry, mission outreach, and staffing during times when communities most need hope and help.
- Challenging Property Plans
For churches and ministries, rising borrowing costs can delay or derail plans for new buildings or improvements. A church ready to move into a building that would enable local outreach might suddenly find it unaffordable.
At Kingdom Bank, we do everything we can to keep ministry mortgage rates as low as possible, helping gospel organisations move forward in faith. Explore our mortgage options here →
- A Different Way to Save
While it’s wise to look after your financial future, it’s also possible to save with a mission. Kingdom Bank offers gospel-driven options. By choosing to receive a modest interest rate, you help fund affordable loans to churches and ministries that might struggle to get support elsewhere.
Churches like Redeemer Church, who were able to hire more ministry staff because their Kingdom Bank mortgage repayments were far cheaper than any other rate on the market.
Faithful Stewardship in a Changing Economy
As Christians, we’re called to approach financial challenges with hope, wisdom, and kingdom-minded stewardship. Whether you’re navigating higher living costs or wondering how to manage your savings in ways that align with your faith, there are meaningful ways to respond.
We’re here to offer individuals and Christian organisations financial options that serve both present needs and eternal priorities.
In times of economic uncertainty, what will it look like for you to trust your finances to an unchanging God?
Find out more about savings accounts that give your money a mission.
Kingdom Bank does not provide financial advice. Please seek independent financial advice when structuring your finances.
About the author
Ross has been a Marketing Executive at Kingdom Bank since 2024, with experience in high street and start-up banks. He is passionate about facilitating positive and effective communication and engagement between the Bank and its customers.
Ross Ellis-Butcher, Marketing Executive
