Inflation has crept up to 3 per cent, its highest level in ten months
Figures released this morning by the Office for National Statistics showed that Consumer Price Index (CPI) rose by 3.0% in the 12 months to January 2025, up from 2.5% in December 2024.
Core CPI (excluding energy, food, alcohol and tobacco) rose by 3.7% in the 12 months to January 2025, up from 3.2% in December 2024; the CPI goods annual rate rose from 0.7% to 1.0%, while the CPI services annual rate rose from 4.4% to 5.0%”.
The increase has been largely driven by services inflation, particularly airfares and private school fees
The biggest worry for low-income families is the unrelenting living standards storm they’re facing, which is not forecast to improve over the course of this Parliament say the Joseph Rowntree Foundation adding that
The outlook for the coming months is bleak, with water, energy bills and council tax all set to go up in April.This will add further worry as household financial security sits on increasingly unsure ground.
Commenting on the rise and its impact, Chris Fletcher, Policy Director at Greater Manchester Chamber of Commerce, said:
“There’s no doubt that the inflation figures make for grim reading. Prices were expected to rise but not at this rate. Our latest Quarterly Economic Survey shows that concerns about inflation grew substantially in Q4 last year and today’s news will only increase businesses worries.
“Energy prices are expected to increase in April and for most businesses they will also be having to contend with a spike in employment costs when the new Employer NIC rates start coupled with increases to the National Living Wage and Minimum Wage. The NIC increase is substantial and is the cost increase that is causing most concern with businesses with many seeing price rises as one way of offsetting the extra money they will have to find every month. For some businesses this equates to tens of thousands of pounds a year. Anyone with a basic understanding of business and economics will realise this will be inflationary.
“With the government’s growth mantra ringing in our ears this is looking an increasingly impossible task as real world impacts of various policies start to take hold. The government should revisit its plans, announced last October, and start to phase in what is, in effect, a huge increase in tax on jobs, whilst there is still time. Businesses understand the need to boost government revenue to help with growth, but not at the risk of wreaking havoc with the economy.”
