Chancellor Rishi Sunak is under mounting pressure to use today’s mini-Budget to give people a helping hand with their finances as inflation hits a 30-year high.
The rate of Consumer Price Index inflation jumped to 6.2 per cent in February, from 5.5 per cent in January, the ONS said on Wednesday morning.
The government has insisted that they will not change the planned rise in National Insurance contributions, but the chancellor could reportedly cut fuel duty to help drivers.
Meanwhile voters overwhelmingly support a windfall tax on North Sea oil and gas companies to support families with mounting energy bills, a new poll for The Independent you have found.
A Savanta ComRes survey for The Independent has found that the majority of voters – including among Conservative voters – support scrapping next month’s 1.25 percentage point rise in National Insurance contributions.
A majority also back a cut to fuel duty and the introduction of a £10-an-hour minimum wage. Families are facing a further hit to their finances next month, with the average £700 hike in annual domestic gas and electricity bills due to take affect.
ICYMI: Inflation hits 30-year high after rising 6.2% in a year
The squeeze on British households’ budgets has gathered pace ahead of Rishi Sunak’s Spring Statement, which is expected to only offer minor tweaks to ease the cost-of-living crisis, business editor anna isaac writes.
The measure of price growth in the economy, the Consumer Prices Index (CPI) is set top 8 per cent next month when the new energy price cap shoots up by more than 50 per cent, the Bank of England said last week. It could stay at this level for close to three months.
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holly bancroft23 March 2022 09:56
5p cut to fuel duty a ‘drop in the ocean’, says RAC
Simon Williams, spokesperson for the RAC, has said that a planned 5p cut to fuel duty would be a “drop in the ocean” and would only take prices back to what they were last week.
speaking on skynews Mr Williams said: “The average price of petrol is now at 167p a liter and diesel at 179p a liter – £91 to fill up an average petrol car and £97 for diesel.
“The cost-of-living crisis is being driven very much by the increase in the price at the pumps. We are calling on the chancellor today to take significant action. He’s taking about a 5p cut in duty, which I think will be a drop in the ocean. That will take us back to a price we paid this time last week.
“What use is that really, it’s something but I think he needs to go further. In fact, he might be better off cutting VAT.”
holly bancroft23 March 2022 09:46
Food bank users saying no to potatoes and root veg because they can’t afford to boil them, boss of Iceland says
The managing director of Iceland supermarket has said that food bank users are saying no to potatoes and root vegetables because they can’t afford the energy required to boil them.
Richard Walker Told Radio 4’s Today program that the cost-of-living crisis was “the single most important domestic issue that we’re facing as a country and it is incredible concerning.”
“You now, we’re hearing about some food bank users declining potatoes and root veg because they can’t afford the energy to boil them,” Mr Walker said.
He added that business was “not an endless sponge that can soak it all up”.
Mr Walkers suggested that the energy price caps for consumers could be extended to businesses.
holly bancroft23 March 2022 09:35
High inflation ‘a complete disaster for living standards’
The sharp jump in inflation is a “complete disaster for living standards” and will mean “pay packets continuing to shrink”, a senior economist at the Resolution Foundation has said.
Jack Leslie warned of more prices rises to come, saying: “Another sharp rise in inflation last month offers a foretaste of the huge income squeeze coming this year, with inflation likely to hit at least 8 per cent this spring – which could be the highest it’s been in 40 years – along with a second spike this autumn.”
He added that the prolonged period of high price rises will be a “complete disaster for living standards”, saying that “millions of people have simply never experienced [this scale of inflation] before”.
“It will mean pay packets continuing to shrink, along with vital income support such as Universal Credit and the State Pension.”
holly bancroft23 March 2022 09:26
‘People are choosing between eating and heating’, former Labor Shadow Chancellor John McDonnell says
Former Shadow Chancellor John McDonnell has said that people are “choosing between heating and eating”. He called on the government to increase borrowing to “protect” people in the short-term.
speaking on skynews, he said: “We’ve got to make sure that we are responsible in everything that we do. The responsible way forward is to recognize that in times like this there is real hardship out there.
“People are suffering. It is true that people are choosing between heating and eating, we are talking about people who have had their wages virtually frozen for nearly twelve years. It’s tough out there.
“Yes we’ve got to protect people in the short-term and that does mean an increase in borrowing in the short-term. The most important thing is you borrow to invest.”
He said that if the government invested further in green energy and insulating homes then they would reap the rewards.
holly bancroft23 March 2022 09:13
Chancellor needs to ‘shore up confidence in the economy’, says director general of the CBI
Tony Danker, Director General of the Confederation of British Industry, has said that Rishi Sunak needs to “shore up confidence in the economy” with his Spring Statement today.
Mr Danker warned that the economy needs to keep growing, “because if we don’t, these problems just get worse”.
He added that in the current climate “there’s a risk that confidence wavers, businesses stop investing, consumers stay at home – so inflation is hard to tackle”.
“If we don’t have tailwinds in our economy, then the headwinds overwhelm us and so the Chancellor has to double down on growth, he has to help hardest-hit households with the cost of living, he has to help lots of businesses who are already dealing with the rising energy costs – there isn’t a price cap – and he needs to encourage businesses to be confident and invest and grow.
“That’s the only way we really get through the year head.”
holly bancroft23 March 2022 08:57
Spring Statement: What can we expect from Rishi Sunak’s mini-Budget?
What announcements might Rishi Sunak make in his Spring Statement later today?
One measure Mr Sunak could unveil would be to cut fuel duty. This would arguably be one of the easiest ways to win over votes and support households with the cost of living crisis.
The chancellor is reportedly gearing up to announce a temporary cut to the duty of up to 5p per litre.
Another option Mr Sunak has would be to hold off the planned national insurance rise. This, however, would represent a major U-turn for the government. They have previously insisted that this will not happen, despite the public protests of several Tory MPs.
There is no talk of the government reducing VAT across the board, but Mr Sunak could give a helping hand to the hospitality sector.
The chancellor could also increase Universal Credit payments to put more money in the pockets of low-income households.
Labor are calling on Rishi Sunak to impose a windfall tax on North Sea oil and gas companies to help with rising energy bills. Mr Sunak has already unveiled his plans to help with energy costs, however, giving a £200 loan to every family from October.
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holly bancroft23 March 2022 08:48
UK and US agree deal to partially end tariffs on British steel and aluminum
The UK government has struck a deal with the US to partially end the tariffs on British steel and aluminum imposed by former president Donald Trump, Andy Gibbons writes.
The Department for International Trade said the US had announced “expansive removal” of section 232 tariffs, which have affected UK exporters, with the changes to take effect on June 1, 2022.
In response the UK will suspend rebalancing measures on US products including whiskey, blue jeans and motorcycles, the department said.
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holly bancroft23 March 2022 08:38
Chancellor faces a ‘very difficult and challenging backdrop’ for today’s Spring Statement, Tory MP says
Mark Harper, Tory MP for the Forest of Dean, has said that Rishi Sunak faces a “very difficult and challenging backdrop” for his Spring Statement after new ONS figures revealed that inflation has risen to a 30-year high.
speaking on skynewsMr Harper said: “We’ve got the economy firing on all cylinders, and thank goodness we did, because it was only a few hours between getting all of those restrictions lifted and then we saw the appalling Russian invasion of Ukraine.
“We’ve gone from one crisis straight into another, which obviously provides a very difficult and challenging backdrop for the Chancellor as he sets out his spring statement later today.”
holly bancroft23 March 2022 08:23
Charts show how UK inflation has accelerated
holly bancroft23 March 2022 08:15
George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.