Category Archives: UK cost of living crisis

Rachel Reeves targets UK’s wealthiest in £26bn tax-raising budget

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Chancellor axes two-child benefit cap and cuts energy bills paid for by mansion tax and freezing tax thresholds

Rachel Reeves targeted Britain’s wealthiest households with a £26bn tax-raising budget to fund scrapping the two-child benefit policy and cutting energy bills.

On a chaotic day that involved key details of her budget accidentally being released early by the Office for Budget Responsibility (OBR), the chancellor defended the measures, saying she was “asking everyone to make a contribution to repair the public finances”, but that she wanted the wealthiest to pay the most.

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Reeves to lay groundwork for tax rises in ‘candid’ speech about budget

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Chancellor to promise ‘fairness and opportunity’ but will not repeat manifesto pledge on tax, after PM’s hint at breach

Rachel Reeves will lay the groundwork for a tax-raising budget that could break Labour’s election promise on income tax, in a major speech in which she will be “candid” about the tough choices ahead.

The chancellor will give the speech as the markets open on Tuesday, when she will promise to make fair choices at this month’s budget but decline to repeat her manifesto pledge of no rise in income tax, VAT or national insurance.

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Signs of peak inflation open door to earlier Bank of England interest rate cuts

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Policymakers under pressure for rethink after price growth in UK remained at 3.8% in September

Has UK inflation peaked? The latest official figures showing price growth in the UK stayed at 3.8% in September seem to suggest so.

The statement cannot be made with absolute certainty yet but many economists reacted to the latest consumer prices index (CPI) data with a message that the only direction for inflation over the rest of the year was down.

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UK inflation unexpectedly remains at 3.8% for third month in a row

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Annual September rate confounds forecasts of a rise, as pace of food price growth slows for first time since March

UK inflation was unchanged last month at 3.8%, confounding expectations of a rise, in welcome news for the chancellor, Rachel Reeves, as she plans for her crucial budget next month.

The Office for National Statistics (ONS) said that inflation measured on the consumer prices index remained at the same level in September as in August and July.

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Real living wage to rise by almost 7% in boost for low-paid UK workers

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Hourly rate to increase in April by 95p to £14.80 in London and by 85p to £13.45 for the rest of the country

Almost half a million workers are to receive a pay boost after it was announced that the real living wage paid voluntarily by 16,000 UK companies will rise to £13.45 an hour in April.

Distinct from the national living wage, which is a statutory minimum, the real living wage is calculated each year based on the cost of essentials, and is paid by more than half of the companies in the FTSE 100.

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Freddo bar creator would be ‘rolling in his grave’ at its price today, daughter says

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Harry Melbourne’s froggy treat that cost 10p in its 1990s heyday sells for about 30p or even up to £1 now

The creator of the Freddo chocolate bar would be rolling in his grave if he could see the prices being charged for a treat that cost 10p back in its 1990s heyday, his daughter has said.

Leonie Wadin said she once waited impatiently for her father, Harry Melbourne, to come home with boxes of Freddos, but has now vowed never to buy another one.

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Rising UK food prices turn cash-strapped shoppers away from high street

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BRC says food prices rose by 4% in July from 2024, while CBI blames economic uncertainty for people not spending

Britain’s largest retailers struggled to entice shoppers back to the high street in July as the rising cost of meat and butter drove up food prices, adding to the pressure on household finances.

According to the latest snapshot from the British Retail Consortium (BRC) food prices rose by 4% in July from a year earlier, up from 3.7% in June and above the three-month average of 3.5%.

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‘We’ve made progress’: environment secretary is upbeat despite Labour’s struggles

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Steve Reed says changes to living standards are happening and will make a big difference to trust in government

It was probably easier for Steve Reed to feel more cheerful about Labour’s most torrid week in government while sitting on bales of hay in the blazing sunshine about 40 miles from Westminster.

The environment secretary might have sympathised with Rachel Reeves and Liz Kendall – he has experience of bearing the flak for some of the government’s most controversial decisions on family farm taxes – but at Hertfordshire’s Groundswell festival, named the Glastonbury for farms, he may simply have been happy not to be pelted with manure by unhappy farmers.

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‘Not an attractive place to shop’: how Poundland lost its appeal to shoppers

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Budget retailer had a pre-tax loss of more than £51m last year and is struggling to lure back customers amid stiff competition from rivals

“It’s not actually that cheap any more. It’s kind of lost its appeal because everything is not a pound.”

Samantha, a shopper outside Poundland’s Luton retail park outlet who is heading off to B&M to find some better deals, sums up the feelings of many of her fellow bargain hunters and a central problem facing the new owner of the budget retailer.

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Sweet dreams: dessert parlours help to revive UK’s high streets

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Market thought to be worth more than £500m as diners seek cheaper alternatives to the pub or a meal out

Dessert cafes and ice-cream parlours are hoping to play a role in a revival of UK high streets and the night-time economy, as people seek an alternative to going to the pub or an expensive meal out.

Their number has soared by almost 700 in the UK in the past decade, according to analysts at Green Street, formerly the Local Data Company, with outlets in places from Aberdeen to Plymouth.

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UK food shops report ‘massive’ rise in pensioner shoplifting

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Kingdom Services boss says retailers seeing ‘different sort of shoplifter’ with more theft by people ‘who just can’t afford food’

Food retailers have seen a “massive” increase in pensioner shoplifters over the last year, according to a leading store security firm, amid the rising cost of living.

John Nussbaum, director of service for retail at Kingdom Services Group, has said his staff were seeing a “different sort of shoplifter now” as the cost of living “pushes people to something they’ve never done before”.

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Gen Z and young millennials battling ‘negative wealth’ as debt burden grows

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Young people whose debts outweigh their assets are at risk of experiencing blighted earnings, and even poorer health

Gen Z and young millennials are battling a “negative wealth” problem due to growing debt burdens that limit their life chances, according to a new analysis from the Fairness Foundation.

The thinktank says negative wealth, where debts outweigh assets, is linked to lower wages and worse health in later life, and that ministers should reintroduce the Child Trust Fund to give young people a greater stake in society.

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Starmer dismisses claims he’s been ‘played’ by Trump, and says future trade deal could lessen impact of tariffs – UK politics live

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Starmer said that a future trade deal with the US might lead to the UK getting some exemptions from the tariffs

Richard Hughes, chair of the Office for Budget Responsibility, is giving evidence to the Treasury committee. There is a live feed here.

Hughes started by telling the committee that he wrote to the chancellor earlier this year to say that, when his five-year term ends later this year, he would like to have a second term in office.

We are of course negotiating an economic deal which will, I hope … mitigate the tariffs.

The US is our closest ally. Our defence, our security, our intelligence are bound up in a way that no two other countries are.

So it’s obviously in our national interest to have a close working relationship with the US, which we’ve had for decades, and I want to ensure we have for decades to come.

We are obviously working with the sectors most impacted at pace on that.

Nobody wants to see a trade war but I have to act in the national interests.

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Major UK investors join push for retail giants to pay workers ‘real living wage’

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Axa and Scottish Widows back ShareAction campaign for chains such as Next to pay at least £12.60 an hour

Major investors including Axa and Scottish Widows are backing shareholder resolutions pressing retailers Next, Marks & Spencer and JD Sports to increase pay for thousands of workers.

More than 100 individuals and eight institutional investors, which manage over £1tn in assets, are backing an effort to encourage companies to pay a “real living wage”, which is designed to ensure workers can cover necessary household costs.

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Labour mayoral candidate on race to stop Reform – and ‘Doge Lincolnshire’

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Jason Stockwood, ex-chair of Grimsby Town FC, has plan for keeping rival Andrea Jenkyns from implementing US-style cuts

Labour can beat Reform UK by focusing relentlessly on the cost of living, the party’s mayoral candidate for Greater Lincolnshire, who is taking on the Conservative defector Andrea Jenkyns, has said.

Jason Stockwood, the former chair of Grimsby Town football club, is standing for Labour in the most high-profile mayoral race of the local elections.

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Energy network owners have made £3.9bn from higher bills, says report

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Citizens Advice believes Ofgem made flawed interest rate calculation for companies in Great Britain

The companies behind Great Britain’s gas pipes and power lines have pocketed a windfall of nearly £4bn from household bills during the energy and cost crisis, according to a report.

The analysis, by Citizens Advice, argued that energy network owners were able to make the “excess profits” over the past four years after the industry regulator misjudged their costs.

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Government under pressure on economy as British households anticipate worsening finances

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CBI says businesses plan to cut jobs and raise prices while debt charity says millions are ‘facing worries’

The government is under growing pressure to get momentum back into the economy amid warnings that businesses plan to cut jobs and raise prices, while millions of families believe their finances will worsen this year.

Before a major speech this week by the chancellor, Rachel Reeves, designed to restate Labour’s commitment to improving the economy, the CBI said private sector firms were urgently assessing their budgets to offset measures announced in last October’s budget.

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One in six UK workers skipping meals to make ends meet, says TUC

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Trade unions body finds 17% have skipped meal in past three months, and as many as 10% do so most days

As many as one in six workers in Britain are skipping meals to make ends meet as households remain under pressure from the higher cost of groceries, energy and other essentials.

Highlighting the impact of the cost of living crisis on working households, figures from the Trades Union Congress (TUC) showed 17% of full- or part-time workers had skipped a meal to reduce their spending in the past three months.

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Give working parents help with childcare and commuting costs, UK thinktank says

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Child poverty plan must address the 70% of families with at least one parent in work, Resolution Foundation says

Labour must offer extra support to working parents, including with childcare and commuting, if it is to fulfil its promise of cutting child poverty, the Resolution Foundation thinktank has argued.

The government’s manifesto promised an “ambitious strategy” on child poverty, and ministers have said they will publish a 10-year plan in the spring.

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Boxing Day footfall down on UK high streets despite discounts

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Data may reflect shift in behaviour influenced by cost of living crisis or front-loading of spending

Fewer consumers made the journey to high streets and shopping centres in search of Boxing Day discounts this year.

Footfall across UK retailers was down 8.9% as of 3pm on Thursday, compared with Boxing Day in 2023, according to data from MRI Software.

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