LONDON (Parliament Politics Magazine): Food prices are rising at their highest rate in nearly 30 years, putting a strain on living standards.
Inflation rose to 5.4 percent in the 12 months ending in December, up from 5.1 percent the month before, inflicting much more hardship on poor families.
Inflation was last higher in March 1992, when it was at 7.1 percent.
Analysts cautioned that, with gas and electricity prices projected to rise further in the near future, it might return to that level.
The government’s price cap, which restricts the number suppliers may charge, has kept energy costs in control for households, but that is poised to change on April 1.
As a result, the energy industry has cautioned that fuel prices could rise by another 50% in the coming months.
Chancellor Rishi Sunak said he acknowledged people’s concerns, but the opposition Labour Party warned working families were experiencing a “triple whammy” of financial strains.
The latest results will put even more pressure on the government, which is already facing criticism over tax increases slated to take effect in April.
They will also feed demands for the Bank of England to increase interest rates in order to curb consumer expenditures and bring inflation closer to the 2% objective set by the government.
The Office for National Statistics announced the latest increase, citing increases in prices of food, clothing and furniture as contributing factors to the increase in cost of living in December.
Inflation explained
The rate at which prices rise is referred to as inflation. If the price of a juice can climb by 5p from £1, then juice inflation is 5%.
Price increases may go unnoticed from month to month. However, prices are rising so swiftly right now that the money individuals make isn’t going as far as it used to.
Separate ONS data released on Tuesday indicated that average salary rises are not keeping pace with rising living costs.
In November, regular salary, minus bonuses and adjusted for inflation, decreased 1% from the same month the previous year.
People with low incomes, according to Paul Johnson, director of the Institute for Fiscal Studies think tank, will take a particularly hard hit by the strain on living standards.
“Everyone, particularly those on modest incomes, has had a long period of wages not really growing any faster than prices over the last decade, so another increase at this point is going to be particularly painful,” he told the BBC.
The boss of supermarket chain Iceland, Richard Walker, said there is an “alarming” increase in the usage of food banks.
He further added that some people might have to make a choice between eating or heating. The store is losing customers because they’re hungry. It is necessary for the government to take it seriously.
