Inflation continues to hound the UK, causing ongoing problems for consumers, businesses and economic sectors coping with the direct and indirect effects of the costs-of-living crisis.
The general public and business figures were both dismayed this morning when it was revealed that the UK inflation rate had risen back up to 4%. Reducing and controlling inflation has been one of the key objectives of the UK government over the past year.
This increase in inflation marks the first rise in 10 months, but Chancellor of the Exchequer, Jeremy Hunt, remains confident in government policy according to Reuters. The outlet quoted Hunt as saying: “Inflation does not fall in a straight line, but our plan is working and we should stick to it.”
However, rising inflation is far from a positive headline and Rishi Sunak’s government may well be concerned about its public image with a general election likely this year. An inflation rate of 4% is double than the 2% rate targeted by the Bank of England.
Alastair Douglas, CEO of TotallyMoney, commented: “For more than two years, inflation has soared above the Bank of England’s 2% target – with the rising cost-of-living affecting low income households the most. One in three people have missed payments on an essential household bill – two million of which were for the first time.
“And while the Chancellor hails the recent National Insurance cut as a victory for working households, four million more low-earning adults are being walked into paying income tax as a result of the government’s decision to freeze thresholds.
“There may be a general election taking place this year, but we need to see a long-term plan of action to help those who need it the most. Without support, the number of people in persistent poverty will continue to grow, impacting their health and wellbeing for years to come.”
With 2024 projected to be an election year – with Sunak confirming so last week – the Labour Party opposition has already made scathing criticisms of the government.
Quoted by the BBC, Rachel Reeves, Labour Shadow Chancellor, took aim at the ‘14 years of economic failure’, of the Conservative Party, adding: “Britain cannot afford another five years of economic failure. Only Labour can deliver the change Britain needs and make working people better off.”
Sunak, Hunt and the Conservative government have been putting a lot of faith in their fiscal and business development policies as a means to boost UK economic growth and ‘level up’ some regions of the country.
In the last budget, back in November, Hunt announced plans for a £500m investment in the UK technology sector, with AI earmarked by policymakers as a particular area of interest.