More reactions to January inflation figures

Responding to today's CPI inflation rate, which remained unchanged at 4.0%, Peter Matejic, Chief Analyst at the Joseph Rowntree Foundation, said:

“Families on the lowest incomes won’t be debating what it means for inflation to remain at 4%. They’ll be debating whether to turn the heating on, or to replace their shoes that have holes in or to skip another meal because they can’t afford it.

“The Government’s cost of living payments gave families a short-term reprieve. Without them, they face an income safety net that offers no safety and the ever-rising cost of essentials like food and energy.

“Politicians can start making a difference at the Budget. Universal Credit needs to reflect the actual cost of essentials. Beyond that, we need an economy that works for people, not one that leaves people exposed to unjustifiable hardship.”

ENDS

Notes to Editors

The Essentials Guarantee would embed in our social security system the widely supported principle that, at a minimum, Universal Credit should protect people from going without essentials. Developed in line with public attitude insights and focus groups, this policy would enshrine in legislation:

• an independent process to regularly determine the Essentials Guarantee level, based on the cost of essentials (such as food, utilities and vital household goods) for the adults in a household (excluding rent and council tax);
• that Universal Credit’s standard allowance must at least meet this level; and
• that deductions (such as debt repayments to government, or as a result of the benefit cap) can never pull support below this level.

Which? statement

Rocio Concha, Which? Director of Policy and Advocacy, said:

“This month's RPI announcement will confirm the worst fears of O2 and Virgin Media customers - who now face the biggest broadband and mobile price hikes by any major provider this April. This comes on top of up to 17 per cent increases last year - that's a huge overall increase that most people would not have anticipated when they first took out their broadband or phone deal. 

“Ofcom has clearly stated the practice of inflation-linked mid contract price rise terms can cause substantial consumer harm. It is unacceptable for telecoms firms to go ahead with above inflation price hikes this April. They must do the right thing and immediately scrap these rises, rather than cynically taking the opportunity to cash in to the detriment of their customers while they still can.”

Prices still rising a “reminder of the costs working people have paid” says IPPR 

Reacting to today’s monthly inflation figures Dr George Dibb, associate director for economic policy at IPPR, said: 

“This announcement that inflation is still not falling is likely just a blip, with the rate expected to come down again over the next few months, but prices are still rising and it’s a salutary reminder of the continuing cost that many working people have paid.   

“We can expect the Bank of England to start lowering interest rates this year, but for many, wages still have some catching up to do. And the gap between benefit levels and a living income remains stratospheric. This is the wrong time for the government to talk about cutting taxes. Instead it should prioritise fixing public services in order to underpin the economic growth that is needed to ensure sustainably rising wages.” 

No news is good news, as inflation remains unchanged in January, with food prices falling for the first time since September 2021 - Resolution Foundation

CPI inflation in January remained at its December level of 4.0 per cent – slightly weaker than the 4.1 per cent the Bank of England and financial markets had expected. This was despite the Ofgem price cap rising in January, which was offset by falling furniture and food prices, the Resolution Foundation said today (Wednesday).

The biggest upward pressure on inflation came from the rise in the Ofgem price cap in January, which rose from £1,834 to £1,928 per year.

But this was offset by welcome falls in furniture and food – with the first monthly fall in food prices since September 2021. The latter is particularly good news for lower-income households struggling with the cost of living crisis, who spend a larger proportion of their income on food.

Unchanged inflation in January is likely to prove a pause in the welcome retreat of inflation, as energy prices are expected to put downward pressure on CPI in the coming months.

There was also good news on underlying inflationary pressures with core and services inflation somewhat weaker than expected. Core inflation was at 5.1 per cent, compared to 5.2 per cent expected by the market, and services inflation at 6.5 per cent, compared to the Bank of England’s expectation of 6.6 per cent.

The latest data shows that no news can be good news along the bumpy road back to 2 per cent inflation, with the expected rise this month not materialising.

Lalitha Try, Economist at the Resolution Foundation, said:

“No news is good news along the bumpy road back to 2 per cent, with inflation flatlining at 4 per cent in January, confounding expectations of a rise.

“Instead, rising energy costs in January were offset by falling furniture and food costs – with food prices falling for the first time since September 2021. This is welcome news for low-income households who spend a higher proportion of their income on food.”

Cost of living crisis still hammering households in every corner of the country – TUC

• TUC calls for ministers to extend cost of living payments which are set to end by March

Responding to today’s (Wednesday) ONS figures showing CPI inflation unchanged at 4% and RPI inflation at 4.9%, TUC General Secretary Paul Nowak said:

“The cost-of-living crisis is still hammering households in every corner of the country.

“Prices are still going up with inflation at double the Bank of England’s target. And whether it’s covering the weekly shop or paying the bills, working people remain under the cosh.

“After 14 long years of stagnating living standards under the Conservatives, it's little wonder so many are feeling the pinch.

“If real wages had grown at their pre-crisis trend the average worker would be earning around £14,500 a year more.

“And with final cost of living payments set to end by March, ministers must act now to extend the scheme and support struggling households.

“The Conservatives have delivered a decade of dismal economic growth which has hit pay packets and household budgets hard.

“It’s time for a government with a serious long-term plan.”