The cost of living is falling in Europe and the US but is still rising in Britain. We look at the major culprits
The Bank of England has struggled to understand why inflation remains high in the UK. It has fallen in France, Germany, the US and especially Spain, where inflation dropped to 2.9% in May compared with the UK figure of 8.7%. Here we look at the many reasons for the current crisis.
Continue reading...Tories are likely to bear the brunt of homeowning voters’ anger in marginal constituencies in next year’s election
As the former chancellor who warned presciently during last summer’s leadership contest that Liz Truss would crash the economy, Rishi Sunak’s calm competence was meant to be his key electoral selling point.
But after Thursday’s half-point rate rise by the Bank of England left thousands of voters facing eye-watering mortgage hikes, a shirt-sleeved Sunak was reduced to insisting he was “totally, 100% on it” when it comes to fighting inflation.
Continue reading...Prime minister says he knows people will be anxious about rate rise but ‘it is going to be OK’
Rishi Sunak has posted a thread on Twitter setting out what the government is doing to help people with the cost of living. It starts here.
He ends by saying “if we can hold our nerve” he is confident the plan will deliver.
Continue reading...While the rate has fallen from its October peak of 11.1%, the figure for May is expected to stay stubbornly high
UK inflation is expected to have remained stubbornly high in May despite a string of forecasts earlier this year predicting a sharp fall in response to tumbling energy prices.
Official figures are expected to show on Wednesday that the UK’s consumer prices index (CPI) eased slightly last month, to 8.4%, from 8.7% in April.
Continue reading...Supermarket inflation slows to lowest rate this year, although households still under pressure
Supermarket inflation in Great Britain has eased to its lowest level this year but remains high, forcing people to change how they eat and cook as household budgets are strained, according to the data firm Kantar.
Grocery inflation declined to 16.5% in the four weeks to 11 June, down from 17.2% last month and a record 17.5% in March. It remains at its sixth-highest level since the financial crisis in 2008, Kantar said.
Continue reading...Rishi Sunak says he is suspending anti-obesity measure to avoid restricting consumer options during cost of living crisis
The government is to delay its planned ban on two-for-one junk food deals – a key anti-obesity measure – for another two years amid the cost of living crisis.
Rishi Sunak will shelve the expected measure targeting multi-buy promotions on products high in fat, sugar or salt (HFSS) to avoid restricting consumer options while prices remain high.
Continue reading...Report by cross-party MPs criticises previous ‘lack of urgency in addressing market failures’
MPs have urged the government to set out its plans to protect households from high energy bills this winter as they said about 1.7 million people, including some of the most vulnerable groups, had been left waiting too long to receive previous support.
The public accounts committee (PAC) said that although schemes were introduced quickly, the government “did not have the bandwidth” to make sure help reached all groups in a timely fashion.
Continue reading...45 breweries, mostly smaller makers, enter insolvency in last 12 months, up from 15 the previous year
The number of UK breweries going out of business has tripled in the past year, with smaller craft beer manufacturers most at risk as consumers opt for cheaper options during the cost of living crisis, according to research.
In total, 45 breweries entered insolvency in the 12 months ending 31 March, compared with 15 in the previous year, according to the most recent official Insolvency Service statistics analysed by Mazars, an audit, tax and advisory firm.
Continue reading...Consumer group tells chancellor ‘blanket approach’ will not address poor households’ access to affordable food
UK ministers’ efforts to reduce soaring food shopping bills “won’t touch the sides” without measures to make small grocery stores more affordable for low-income households, the chancellor has been warned.
Which?, the consumer group, has written to Jeremy Hunt over concerns that a blanket approach to lowering supermarket bills will not address the problem of accessibility to affordable food, after reports that ministers are considering a voluntary price cap scheme.
Continue reading...Statutory caps were brought in under Heath, now the government wants a voluntary store scheme to meet Sunak’s pledge to halve inflation
A cost-of-living crisis. Pressure on the government to step in to help hard-pressed consumers. Calls for supermarkets to cut prices on staple food items. Substitute Rishi Sunak for Ted Heath, step into a time capsule and journey back to Britain in 1972.
Let’s be clear: ministers are not considering imposing the sort of statutory price controls on a loaf of bread, a pint of milk or a bar of soap that were put in place half a century ago. Not now and not ever, according to Whitehall sources. But it has emerged that Sunak and his team are certainly not averse to the big supermarkets coming up with their own voluntary agreement to reduce the cost of the weekly shop.
Continue reading...British Retail Consortium says rate fell from 15.7% to 15.4% even as rise in overall shop prices hits fresh high
Food inflation in the UK fell in May, lifting hopes that the rapid increase in grocery prices may have reached its peak after keeping the broader consumer prices index painfully high so far this year.
After more than a year of sharp increases in the price of food, the British Retail Consortium (BRC) said annual food inflation eased this month from 15.7% to 15.4%, even as the overall rise in shop prices hits a fresh high.
Continue reading...The once humble, low-cost staple more than doubles in price, putting many fish and chip shops at risk
Whether it’s fried, baked or mashed, potatoes have traditionally been a low-cost staple food in the UK – but not any more.
A surge in costs is clobbering high street chippies, while in the supermarket, oven chips and the once humble baking potato are casualties of soaring grocery prices.
Continue reading...High inflation likely to push interest rates above 5% and force up mortgage and loan payments just ahead of election
Rishi Sunak has been warned the UK economy could be in recession next year as stubbornly high inflation pushes interest rates to more than 5% before the next general election.
Setting the stage for a further rise in borrowing costs on mortgages and loans for millions of households, economists predicted the Bank of England could be forced to drive Britain’s economy into a recession to tame inflation.
Continue reading...Supermarket shortages mean community food projects will have a prominent place in this year’s show
Supermarkets have rationed fresh fruit and vegetables in recent months as a combination of Brexit, bad weather and labour shortages has hit supply and driven prices up.
Those shortages have led to a surge in people growing their own, according to the Royal Horticultural Society, and that trend will be reflected at the Chelsea flower show from 22 May.
Continue reading...Cost of period products has risen and campaigners say saving is not being passed on by retailers
The Treasury is analysing whether the removal of the “tampon tax” – trumpeted last week by Rishi Sunak as one of the benefits of Brexit – has helped lower prices at all, amid concerns the saving is not being passed on by retailers to women.
Responding to a written question from the Labour MP Ruth Cadbury, the government said a tax reduction was able to “contribute to the conditions for price reductions” and it was “looking into whether this important zero-rating is being passed on by retailers to women as intended”.
Continue reading...With cost of cleanup to be passed on to bill payers, analysis shows they will also pay £624 more by 2030 to fund investor payouts
Water companies will pay an estimated £14.7bn in dividends by the end of this decade, while making customers pay for new investment to stem the tide of sewage pollution in seas and rivers, analysis for the Observer has revealed.
Liberal Democrat MP Tim Farron denounced the billions going to shareholders as “absolutely scandalous” while families struggling with the cost of living would be facing increases in bills to pay for the sewage cleanup.
Continue reading...But campaigners say it will not give much relief to struggling households as government support ends
Household energy bills could fall to an average of £2,053 a year this summer as the regulator prepares to lower its cap on energy prices next week, according to analysts.
However, campaigners have warned that the lower cap on energy bills, to be announced on Thursday, is unlikely to provide much relief to households that struggled to pay their bills over the winter because the government’s support schemes have come to an end.
Continue reading...Supermarket is consulting about removing a 60p an hour supplement at 39 stores outside M25 despite the cost of living crisis
Asda is planning to cut pay for about 7,000 workers in stores close to London by about 5% despite the surge in the cost of living in Britain.
The UK’s third biggest supermarket, which was bought by the billionaire Issa brothers and private equity firm TDR Capital in 2020, said it was in consultation about removing a 60p an hour supplement from workers at 39 stores sited outside the M25 but near to the capital.
Continue reading...On flight to Japan for G7, PM says ‘economic optimism is increasing’ and insists Brexit is working
Rishi Sunak has been accused of being out of touch with ordinary families after claiming the economy was looking up and people’s household incomes were “hugely outperforming” expectations despite the cost of living crisis.
On a flight to Japan for the G7 summit of world leaders, the prime minister said that despite consumers struggling with high inflation and the cost of food and energy, there were “lots of signs that things are moving in the right direction” with the economy.
Continue reading...Ex-Brexit party MEP says there is no ‘given right’ to low food prices despite families struggling with cost of living
Families should go without cheese sandwiches if they cannot afford the ingredients, Ann Widdecombe has said.
The former Brexit party MEP said there was no “given right” for low food prices, despite being told families “cannot afford to feed their children” and were having to make huge sacrifices as the cost of living crisis deepens.
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