Chancellor Rishi Sunak has released a statement as the cost of living crisis worsens. Data from the Office for National Statistics released today (Wednesday 18 May) show that inflation hit 9% in the year to April, as measured by the consumer prices index (CPI).
The increase, which has surged from 7% since March, is the highest one-year increase in consumer prices in more than 30 years. It will mean that the cost of living rises even further and people's money won't travel as far.
Mr Sunak said: “Countries around the world are dealing with rising inflation. Today’s inflation numbers are driven by the energy price cap rise in April, which in turn is driven by higher global energy prices.
Read more:
“We cannot protect people completely from these global challenges but are providing significant support where we can, and stand ready to take further action.
"We’re saving the average worker £330 a year through reducing National Insurance Contributions, changing Universal Credit to save over a million families around £1,000 a year, and providing millions of families with £350 each this year to help with their energy bills.”
Energy bills surged during March, when the price cap rose 54%. It meant the average household was paying an extra £700 a year for their energy bills. Regulator Ofgem decide the price cap - the maximum amount an energy supplier can charge its customers - and its chief officer recently proposed that it is reviewed four times a year, rather than twice.
Jonathan Brearley previously told Sky News the shake up means the cap 'would go up more quickly as prices go up, but equally importantly as those prices come down, then the price cap comes back down again.'
What do you think? Have your say in our comments below.
And it looks as though costs will continue to hike in October. Mr Brearley added that bills are 'likely' to go up again, due to the 'sustained increase in gas prices' fuelled by the Russian invasion of Ukraine.
It has had a clear impact on people’s finances. A survey by McKinsey, a consultancy firm, found that 61% of households are more conscious about the amount of energy they use at home. The survey found that rising prices were the biggest concern that respondents had in the UK, followed by the invasion of Ukraine and then Covid.
Grant Fitzner, chief economist at the Office for National Statistics (ONS), said: “Inflation rose steeply in April, driven by the sharp climb in electricity and gas prices as the higher price cap came into effect.
“Around three-quarters of the increase in the annual rate this month came from utility bills. We have also published new modelled historical estimates today which show that CPI annual inflation was last higher 40 years ago.
“Steep annual rises in the cost of metals, chemicals and crude oil also continued, along with higher prices for goods leaving factory gates. This was driven by increases for food products, transport equipment and metals, machinery and equipment.”
