UK inflation has hit a 41-year high of 11.1%, according to data published by the Office of National Statistics today. And a Bristol charities and business have told of the devastating impact the rate is having.
The report comes a day before of Chancellor Jeremy Hunt is due to reveal his Autumn budget, in which it is anticipated he will announce wide-reaching tax increases and public spending cuts.
Discussing how high costs are affecting the region’s most vulnerable, Jennie Prewett, founder and trustee at Bristol-based charity, Incredible Kids , said: “Inflation is having a devastating impact on charities, as people have less disposable income and are not in a position to donate, even if they want to. Every last penny is being spent on energy bills and rising mortgage payments.
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“Right now, the people we help, namely families with disabled children, can't turn the heating off, can't save on petrol and can't swap to different cheaper brands of food without causing harm or distress to vulnerable children.”
Incredible Kids provides spaces for play and support for families with young people with additional needs. Prewett said that although government support had been helpful, it doesn’t really address the scale of the problem facing those on low incomes. She said: “The cost of living payments we receive are welcome, but they fall woefully short of what's needed for carers managing on the very tightest budgets.
“Charities are under unprecedented pressure, and we are arguably only at the beginning of what the Bank of England predicts could be the longest recession on record. Charities are in the most precarious position I can remember.”
It's not just charities that are struggling. Although ONS chief economist, Grant Fitzner, said that the latest data showed that there was evidence that costs facing businesses are rising more slowly, driven by crude oil and petroleum prices, many small traders are finding the situation extremely difficult.
Oli Garnett, co-founder of Bristol-based creative agency, Something Familiar, said: “Inflation, and the current economic crisis, are pummelling small businesses. Energy bills have gone through the roof at the exact time that sales are starting to suffer as people have less money to spend and other businesses start to batten down the hatches. It's absolutely brutal out there right now, and we are still only at the beginning of a recession that could last the whole of 2023."
The new year ahead is giving Dave Kelly, co-founder of Clifton butcher Ruby & White, cause for concern, he said: “The cost of almost everything is going up, and it's hitting both businesses and consumers like a wrecking ball. Nobody thought things could get much worse after the pandemic, and yet here we are.
"With the Autumn Statement likely to see taxes go up and cutbacks announced, 2023 is already a year to forget, and we're not even there yet. It's time to buckle up for a torrid 12 to 18 months ahead."
The disproportionate effect that soaring inflation has on those with lower earnings is driven by skyrocketing food prices, as this is where a greater proportion of smaller incomes is spent. The cost of food and non-alcoholic drinks rose above inflation at 16.4% in the twelve months to Oct 2022, the fastest rate since 1977.
In its findings, the ONS said that in the 12 months leading to October, consumer prices rose 11.1%, up from 10.1% in October, the highest level since October 1981. In repose to the latest figures from the ONS, Mr Hunt said: “We cannot have long-term, sustainable growth with high inflation. Tomorrow I will set out a plan to get debt falling, deliver stability, and drive down inflation while protecting the most vulnerable.”
A breakdown of the data supplied by the ONS demonstrates that inflation is currently higher for low-income households, at 11.9%. This compares to 11.1% for average households and 10.5% for high-income households. Meanwhile, Consumer Price Index inflation for those living in council or housing association accommodation is 12.2%.
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