Inflation wiping out pay increases and year of financial fear continues

Responding to news that CPI inflation has reached 9.4%, Rebecca McDonald, Chief Economist at the independent Joseph Rowntree Foundation said:

“With inflation reaching 9.4% and wiping out pay increases, the cost of living crisis is only worsening and no time can be lost in preparing the country for profoundly difficult months to come. Watching events in Westminster, you could conclude that the crisis has been paused – if you are struggling to take showers and put food on the table it won’t feel like it.

“Just last month we found that about 7 million households have already missed out on essentials like heating, toiletries or showers because they couldn’t afford them. Now the cost of essentials such as food is rising again and more people than ever are enduring a year of financial fear. This country still has a government and families under pressure will be wondering why further urgent solutions needed to shore up family finances ahead of the winter are not yet being put in place.

“A simple thing the government can do now is to stop deducting debt repayments from benefits at unaffordable rates, which leaves too little to cover the essentials at the best of times. All those putting themselves forward to lead the UK should pledge to increase basic Universal Credit entitlements to ensure that our social security system always, at a minimum, enables people to afford the essentials when they fall on hard times.”