A think tank has warned that a second sharp rise this fall could cause inflation to exceed 10 percent for the poorest households.
Food inflation is two percentage points higher than its historical average and the poorest tenth of households spend twice as much on food and energy bills as the richest tenth, according to the Resolution Foundation.
It said the war in Ukraine could supercharge food and energy inflation this year, which would hit Britain’s poorest families particularly badly. Higher inflation will create higher debt repayments for the government and a deeper income pressure for the average household. Conflict weakens GDP growth, increasing the likelihood of a recession.
An analysis by the New Economics Foundation suggests that by next month, about half of all children will be living in families that donate food, clothing or shoes.
The study comes amid intense warnings about the cost-crisis facing British families. Martin Lewis, founder of MoneySaving Expert, says some poor Britons will “just starve or freeze” after the average annual fuel bill rises to around £ 2,000 next month and possibly rises to 3,000 3,000 in October.
Yesterday, the ministers rejected Spring’s statement on reducing the British tax bill, which Sage Sunak will present next week. Asked if the chancellor would reduce taxes, leveling-up secretary Michael Gove said: “No. All we have to do at the moment is to provide support in every possible way. We have reduced the council tax for those in the lower band. We are doing this on purpose to gain the support of low-income people. “
The Govt has also ruled out canceling or delaying national insurance doubling next month. “We need to increase national insurance to ensure we can finance the NHS and social care to address the cowardly backlog,” he said.
Last week, David Cameron said the government should reduce taxes “to tackle the cost of living”. He said: “I am often criticized for the tough decisions we have made in the economy, but you have to try and keep government spending low. Because … if you can keep government spending, you can keep people’s taxes low, Help with the cost of living. ”
Gordon Brown told the Sunday Times yesterday: “You can’t keep fuel prices, you can’t raise food prices, you can’t raise taxes and you can’t cut benefits. You can’t do all these things at the same time. “He said that while Labor in 2002” spent two years preparing for the National Insurance Rise “, Sunak” dropped the bomb without any preparation work. “
James Smith, research director at the Resolution Foundation, said: “Until recently, the Chancellor was approaching the public with good news about public finance in his forthcoming spring statement and with little pressure to call for any major policy. Rapidly rising inflation due to the conflict in Ukraine has changed all this. The prospect of a return to standard of living this year is rapidly declining as inflation rises and the risk of another recession is looming. [He] So it’s difficult to respond, and it’s possible to choose the most expensive. “