Consumer price inflation, UK: May 2023 and responses

Consumer price inflation, UK: May 2023

Chancellor responds to ONS May inflation statistics

Chancellor of the Exchequer Jeremy Hunt said:

“We know how much high inflation hurts families and businesses across the country, and our plan to halve the rate this year is the best way we can keep costs and interest rates down.

“We will not hesitate in our resolve to support the Bank of England as it seeks to squeeze inflation out of our economy, while also providing targeted support with the cost of living."

Notes to editors

Additional information:

• Inflation is a problem being faced by many economies and the UK is not immune from these pressures.
• The government is tacking inflation through:
• Its steadfast support for the independent Monetary Policy Committee at the Bank of England as it takes action to return inflation to the 2% target
• Active policy decisions including the Energy Price Guarantee and maintaining the 5p cut in fuel duty
• Taking difficult, but responsible fiscal decisions with supply-side measures including a package to boost labour supply, providing a boost to growth without irresponsibly fuelling inflation
• Ministers keeping in close discussion with food producers and supermarkets about the cost of food, and following live Competition and Markets Authority reviews of the groceries sector.
• Monetary policy is the responsibility of the independent Bank of England. The government remains fully committed to the Bank’s independence, and the inflation target of 2%.
• Total government support to help households with rising bills in 2022-23 and 2023-24 totals £94 billion, which is equivalent to £3,300 per household on average. This includes:
• Cost of living payments to households on eligible means tested benefits, pensioner households, and to individuals on eligible disability benefits.
• Extensions to the Household Support Fund.
• The Energy Price Guarantee and Energy Bills Support Scheme.
• Freezes and cuts to fuel duty and alcohol duty freezes.
• Support with upfront childcare costs for those on universal credit.
• Reducing the universal credit taper rate.
• Uprating the state pension and benefits in line with inflation.
• Increases to national insurance thresholds.

Inflation figures: Government "failing miserably" to bring relief to families 

Responding to the latest figures showing inflation remained at 8.7% in the year to May, Liberal Democrat Treasury Spokesperson Sarah Olney MP said:

"These worse than expected figures show the government is failing miserably to bring inflation down and provide relief for struggling families facing soaring bills.

“Homeowners now face the likelihood of even more interest rate hikes adding to their monthly mortgage payments, all while the Chancellor just sits on his hands.

“It beggars belief that ministers are refusing to support hard-pressed families when it’s this Conservative government’s catastrophic failure to run the economy that caused this crisis.

“This must be the most uncaring Government to ever walk into Downing Street. It’s as if ministers are living on another planet.”

Rachel Reeves responds to new inflation figures

Responding to inflation figures, Labour reveals food prices in Britain rising faster than France, Germany and the US – leaving families paying over £1,000 a year more

With Tory economic failure keeping inflation high at 8.7% this morning, Labour publishes new analysis showing how the average household in the UK is paying over £1,000 a year more for food this year than in 2020/21.

Not only this, but the party reveal how Brits are seeing food prices rise at the fastest rate across the G7, including 20% faster than in France, almost 30% faster than in Germany and over 3 times the rate in the US.

Saying that “this Tory government can’t get a grip of this problem because they are the problem”, Shadow Chancellor Rachel Reeves said the party would bring back security for the economy and for family finances. 

Labour’s Shadow Chancellor Rachel Reeves said: 

“This Tory government can’t get a grip of this problem because they are the problem. 

“13 years of the Tories and their disastrous mini-Budget are damaging our economic security and leaving families worse off. 

“Simply continuing on this Tory path of managed decline is not the summit of Labour’s ambition.

“We need a more secure economy, more secure family finances and a plan to help us grab hold of the opportunities before us. 

“With a relentless focus on the cost of living, our strong fiscal rules and our mission for growth, that is what a Labour government will bring.” 

Ends  

Notes to editors 

• Background briefing on government inflation record attached 
• The ONS calculate that food inflation was 18.4% in the UK in May 2023. https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/april2023
• According to OECD data, the equivalent rates for France, Germany and the US are 15.7%, 14.5% and 5.6% https://data.oecd.org/price/inflation-cpi.htm
• The UK therefore has seen food prices rise 23% faster than France over the last year, 27% faster than Germany and at 3.3 times the rate in the US.
• A typical household spent £69.20 a week on food and non-alcoholic drinks in the year to March 2021 according to the ONS https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/expenditure/bulletins/familyspendingintheuk/april2020tomarch2021
• Adjusting for food price inflation between March 2021 and May 2023, a household would spend £89.29 a week on the same basket of goods https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/d7bu/mm23
• This works out as £1,045 more per year.

Inflation: little comfort for workers and their families - Unite

Commenting on the latest ONS inflation figures released today (Wednesday 21 June 2023), Unite general secretary Sharon Graham said: “These figures give little comfort to what is happening in the real world of workers and their families. Month on month, they continue to feel the pain of their wages trailing behind escalating prices. Just look at the rising cost of groceries up more than 16% on last year.

“Unite remains focused on fighting for workers and their pay. Already winning £350 million back in the pockets of our members.”

No relief for the 7.3 million going without essentials - JRF responds to CPI inflation figures

Today’s CPI inflation figure remaining stubbornly high at 8.7% comes at the end of two years where prices have risen by over 20%. JRF’s cost of living tracker (published today) shows that recent price rises combined with historically inadequate social security have meant that despite the government stepping in to support those on low incomes, things are simply not getting better.

Anticipated interest rate rises tomorrow are also causing rising alarm for millions, especially those who have built up arrears and debts due to the prolonged crisis.

Around nine in ten (87%) low-income households on Universal Credit have gone without at least one essential for the third survey in over a year – three quarters (76%) having gone hungry, cut down on or skipped meals in the last 30 days, demonstrating the urgent need for an Essentials Guarantee to protect the nation’s health.

Commenting on the latest inflation figures, Rachelle Earwaker, Senior Economist for the Joseph Rowntree Foundation said:

“Last month, 5.7 million households did not have enough money to buy food and were skipping meals or cutting back on how much they could eat. Inflation remains stubbornly and unexpectedly high and even if it fell now that would not mean essential items suddenly become affordable. In fact, fresh and healthy food seems increasingly out of the reach of many with food inflation still over 18%.

“Stubbornly high inflation puts the Bank of England in a difficult position tomorrow and this bodes poorly for the 4.5 million people who are already in arrears with essential costs such as rent and household bills. There is no letup for those facing hardship and millions who are feeling the pinch from all angles and will be feeling no relief today.

“In May 2023 our tracker found that over half of low-income households on Universal Credit have been going without three or more of the essentials that we all need to live – items like food, a warm shower or basic toiletries.

“Going without essentials places a huge burden on families and the scale of hardship means the effect will be felt for years to come. Without action to implement an Essentials Guarantee, many families face the bleak prospect of running to catch up but never doing so because they are trapped by debt, rising prices and worsening health”.

JRF, together with the Trussell Trust, is calling on the Government to implement an Essentials Guarantee, to ensure that, at a minimum, the basic rate of Universal Credit at least covers life's essentials and that support can never be pulled below that level.

The tracker found:

• 5.7 million low-income households are having to cut down or skip meals because they don’t have enough money for food, while the number going without items such as food, heating or basic toiletries (63%) has remained around 7 million for more than a year.  
• 2.3 million low-income households on Universal Credit, more than two thirds of those receiving Universal Credit, have been forced into changing the kind of food they buy – including making less nutritious choices

Which? comment

Sue Davies, Which? Head of Food Policy, said: 

“The UK’s stubbornly high inflation is extremely worrying. Rising food prices are the biggest concern for many and while inflation there fell slightly, supermarket prices are still incredibly high. Millions are struggling to put food on the table - with some parents telling us they are skipping meals just to make sure their children have something to eat.

“Now is the time to act. The government must work to get urgent commitments from supermarkets on stocking essential budget ranges in all their stores, particularly in areas where people are most in need, as well as make pricing much clearer so shoppers can compare prices and find the best value products.”