By Matt Rodda
Last week the annual inflation figures were released, and it revealed the real day-to-day challenges that are faced by local families.
The Government championed one figure which suggested that inflation had dropped to 8.7% – a reduction from the previous 10.1%.
A fall in inflation doesn’t mean that goods and services are getting cheaper, it just means that the speed at which they are becoming more expensive is slightly slower.
This technical fall masked a bigger problem because inflation on food is at a record high – 19.1% and on certain food items the increase is even higher. Family favourites such as eggs are up 37%, cheese is up by 30% and the price of pasta is not 27% more than last year.
It’s not just food where prices are causing real problems. The rate of inflation also determines the increase on broadband and mobile phone monthly contract payments and high interest rates also lead to ever increasing interest rates.
The Bank of England has raised the interest rate to 4.5% and they are predicted to go up to 5.5% in the next couple of months, adding hundreds of pounds to those with credit cards or car loans and mortgage payments.
According to the Office of National Statistics, in 2022, the average salary rose by just £3 a month – meaning most people will be worse off this year than they were last year.
When wages rises are eaten up by run away inflation, ever increasing bill and inescapable interest rate rises it creates a viscous economic cycle. Less money in pockets, means lower spending in our shops which slows the economy.
All of this is compounded by a government which has given us the highest tax burden in modern history to compensate for a decade of low growth.
Adding in the price of domestic energy – double what it was 12 months ago, while the oil and gas giants report record profits – it is easy to see why the demand at food banks is growing and more and more families are finding themselves in poverty.
The answer, though, isn’t simple. It will require rebalancing the economy and ensuring that those with the broadest shoulders pay their fair share in taxes and investing in UK based green energy production to reduce our dependency on foreign oil and gas and growing the economy.
This is what I have championed in Parliament and what I will continue to call on the Government to do as this is the only way to tackle the cost-of-living crisis.
Matt Rodda is the MP for Reading East
