What can Rishi Sunak do to relieve the cost of living crisis?
Russia’s invasion of Ukraine and the resulting economic sanctions have exacerbated a cost of living crisis that was already well under way, and the chancellor is under pressure to do more to help at his spring statement on 23 March.
Last month, before Russia’s invasion of Ukraine, with energy prices already surging, the chancellor announced a package of measures to help to cushion the blow to households of rising domestic fuel bills.
They included a £200 discount on consumers’ bills in October, which will have to be repaid through their bills over the following five years; and a £150 council tax rebate for homes in bands A to D.
The bill payback scheme has been controversial, with financial expert Martin Lewis calling it a “worrying gamble” which risked unravelling if gas prices did not fall back as expected.
Economy-wide inflation was already running at 5.5%, the highest rate in almost 30 years, and is expected to surge higher in the coming months.
With state benefits due to be uprated in April by a much more modest 3.1%, many lower-income households were already likely to see their living standards fall.
At the same time, the 1.25 percentage point increase in national insurance contributions earmarked for health and social care comes into effect in April.
Homeowners on floating-rate mortgages will also have been affected by the Bank of England’s decision to increase interest rates in February, with further rises expected in the coming months.
Thinktank the Resolution Foundation has called it the biggest hit to living standards since the 1970s.
Swingeing sanctions on the Russian economy, including a ban on oil imports from next year, have sent oil and gas prices through the roof.
Gas has traded above £5 per therm, compared with
Read more on theguardian.com
