Families in Britain are being warned they could be set for a “living standards crisis” after new figures showed inflation at a two year high.
The consumer prices index, which measures living costs, has gone up to 1.2 per cent in the year up to November. That is a marked increase from October when the figure was standing at 0.9 per cent. The rise is bigger than had been expected and has mainly been driven by increases in the prices of clothing and fuel.
The latest Government statistics are even more concerning as, alongside rising prices come a slowdown in wage growth. And, anaylsts say prices are still rising and will continue to do so well into 2017.
Manufacturers were reporting their costs had gone up by 13 per cent during November, sparking fears that it will only be a matter of time before further costs are pushing onto consumers. The increase is being blamed on June’s referendum, which led to plummeting Sterline values, meaning the price of imports is now higher.
More rises on the way
Businesses now have some tough decisions to make. Can they manage to swallow the increases themselves, meaning a lower profit margin, or do they pass them on to consumers? Experts are predicting that by spring, inflation will stand at two per cent and later in the year, it will soar to three per cent.
Unions are calling for swift action from the Government to prevent a living standards crisis. TUC General Secretary Frances O’Grady said that working people had already had no wage growth over a decade and were now facing being hit in the pocket again. She urged the Government to set out a clear Brexit strategy which made sure jobs, pay and rights were all protected.
Meanwhile, a spokesperson for the Treasury pointed out that the British economy is still strong and that working people were benefiting from tax cuts.