Inflation may have fallen but the cost of living crisis is going nowhere

Responding to the latest figures on UK inflation, which shows inflation has falled to 4.6%, Lydia Prieg, Head of Economics at the New Economics Foundation, said:

“Inflation may have fallen but prices are still rising and the cost of living crisis is going nowhere. The British people have been robbed by inflation, while this government has stood back and let it happen.

“We have one of the highest inflation rates in the G7. It’s government choices that have left us struggling to tackle inflation and left us vulnerable to future inflationary shocks in volatile global fossil fuel prices. The government’s failure to invest in renewables and home insulation has meant we have the highest energy bills in Europe.

“This government urgently needs to help make life more affordable for families. They should invest in home insulation and renewables to get prices down for British families in the long-run. And consider cost-of-living payments funded by a windfall tax in the short-run.”

In response to the news that the Chancellor is considering linking the increase of working-age benefits to the October inflation rate, Tom Pollard, Head of Social Policy at the New Economics Foundation, said:

“Shifting the goal posts now to uprate benefits by October’s inflation figures rather than September’s, as is convention, would be a shameful way to short change our poorest households.

“Benefits are at historically low rates in real terms due to cuts and freezes over the last decade. Low-income households bare the harshest brunt of inflation and many are simply unable to make ends meet

“Benefits rates should be pegged to a meaningful assessment of what people need to meet their essential needs. Increasing these rates in line with inflation should be a guaranteed minimum.“

Notes to Editors

Lydia Prieg, Head of Economics at the New Economics Foundation, and Tom Pollard, Head of Social Policy at the New Economics Foundation, available for comment.

The New Economics Foundation is a charitable think tank. We are wholly independent of political parties and committed to being transparent about how we are funded.