Further reactions to today's Inflation figures

Responding to today’s CPI figures showing prices rose by 4.6% in the year to October, Dr George Dibb, head of the Centre for Economic Justice at IPPR, said:

“Inflation coming down doesn’t mean lower prices – it means that prices are still rising, just not as fast. Today’s data doesn’t herald the end of the cost-of-living crisis by any stretch of the imagination. Prices today are on average more than 15 per cent higher than they were in November 2021. Many households will still be struggling to make ends meet with these higher costs.

“One of the starkest cases is housing costs – 120,000 households renewed their fixed term mortgages every month in 2023. This is because the majority are increasing from below 2 per cent interest rates which will remain high for a long time. That’s almost 4,000 people newly hit by a disposable income squeeze every single day.” 

TUC: “Britain cannot afford the Tories”

• “An arbitrary inflation target is no cause for self-congratulation" - TUC

Commenting on today’s (Wednesday) inflation figures showing CPI inflation at 4.6%, TUC General Secretary Paul Nowaksaid:

 “The UK has the highest inflation in the G7. Bills and prices are sky high and still going up.

 “While other countries have done more to reduce cost of living pressures, working families and businesses here remain seriously under the cosh.

 “The Conservatives’ lack of a credible economic plan is costing us dear.

“An arbitrary inflation target is no cause for self-congratulation. Britain cannot afford the Tories.”

ENDS

Notes to editors:
- Inflation figures are available at https://www.ons.gov.uk/releases/consumerpriceinflationukoctober2023

-RPI inflation is at 6.1%

JRF: Today’s big fall in inflation brings no sense of relief to millions of families who sold their belongings or took out loans just to afford food and bills

With today’s news that inflation is at 4.6%, JRF’s latest cost of living tracker found a third of all families on a low income – 3.8m households – had to sell something they owned just to cope with rising costs.  

This is virtually unchanged since May 2023 when inflation was almost double what it is today – 8.7%

In October 2023, half of all low-income households - 5.9m - reduced meals, skipped meals altogether or just went hungry – the highest since these surveys began. A quarter of low-income households said they had borrowed money just to buy food.

This is shocking but not surprising. Using today's ONS data, JRF calculates overall inflation is 20% higher than in April 2021. Food prices are around 30% higher and energy prices are still up by around two thirds compared to then. Benefits are only 13% higher. 

CPI is the change in prices compared to one year ago and today's fall is mostly the result of the last big energy price hike being 13, rather than 12, months prior to the most recent data. 

Responding to today’s inflation figures, JRF Chief Analyst Peter Matejic said:

“The people who had to take on debt in order to eat, or the people who took something they cherished to a pawnbroker just to buy warm clothes for their children, are not feeling the financial security Rishi Sunak promises. They live in a world where their income, in many cases, simply doesn’t cover costs while the Government talks about cutting their support further. 

“Ministers claim that getting inflation down will make everyone’s money go further but, even after this fall, prices are still far higher than they were last year, rising at more than twice the Bank of England’s target rate. People are still having to go to great lengths just to afford everyday essentials and often are going without. 

“It’s indefensible that the Government is reportedly considering cutting the benefits of struggling families worried for their future, with news stories suggesting it plans to use today's figures, instead of last month's, to fiddle the figures and hide a big cut. 

“In the upcoming Autumn Statement benefits must be increased in line with inflation and Local Housing Allowance (LHA) must be unfrozen to support private renters with their housing costs. The Chancellor should also take steps to ensure that Universal Credit, at a minimum, always enables people to afford the essentials.” 

Ends

Notes to Editors 

JRF’s cost of living tracker is the fifth in a series of large-scale studies of over 4000 households in the UK on low incomes (the bottom 40%) conducted by Savanta, focusing on the impact of the cost-of-living crisis. This survey was carried out between 12 October and 31 October, 2023.  

Read more about our tracker here: https://jrf-jrht-brand.frontify.com/share/4R7UAooTBz3ZU2MRMzFc

The latest data on CPI inflation can be found here: https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/latest

UNITE

Inflation: Workers and communities face another winter of sky high bills

Sharon Graham responds to today’s ONS statistics on inflation

Unite general secretary, Sharon Graham said: “Inflation is still far too high. The abject political failure to tackle rampant profiteering means that workers now face another winter of sky high bills.

“Energy prices are 50 per cent higher for consumers after two years of this crisis. Big business is driving inflation while our communities are left exposed to an ongoing crisis that is not of their making.”

Resolution Foundation

Sharp inflation fall sends CPI to its lowest level since 2021 – but scale of two-year inflation shock has left a legacy of far higher prices

CPI inflation fell by more than expected to 4.6 per cent in October – its lowest level since October 2021, and the largest annual fall in more than 40 years. But with overall prices rising by 16 per cent over this two-year period, and energy costs rising by 49 per cent, families are still feeling the effects of this huge inflation shock, the Resolution Foundation said today (Wednesday).

CPI inflation fell sharply last month, as last year’s surge in energy costs fell out of the figures. But while a big fall was expected, the size of the fall is welcome news in the battle to tame inflation. As well as easing cost of living pressures, the sharp fall will reassure policy makers that higher interest rates are having their effect on cooling prices.

However, while inflation has fallen rapidly, the effects of a two-year inflation shock have left a legacy of far higher prices. The Foundation notes that the overall price level has risen by 16 per cent between October 2021 and October 2023, while energy costs have surged by 49 per cent, and food bills by 28 per cent. Over this same period, average weekly earnings have risen by just 14 per cent.

James Smith, Research Director at the Resolution Foundation, said:

“Inflation fell at its fastest annual rate in over four decades last month, as last year’s surge in energy bills fell out of the data.

“Such a sharp fall will be welcomed by policy makers and the wider public alike. But the cost-of-living crisis is far from over as the scale of Britain’s inflation shock has left a legacy of far higher prices.

“Over the past two years, the cost of energy has surged by 49 per cent while food prices have risen by 28 per cent – far greater than the 14 per cent in average earnings over this period.

“The sharp rise in the cost of these essentials mean that lower-income households have experienced the biggest inflation shock, and shows the very real risks to their living standards if the Chancellor does not fully uprate benefits in line with prices to maintain their real-terms value.”