Inflation is heading to 8% and earnings are rising too slowly – but the chancellor will be hard pushed to help out in his spring statement
Poor old Rishi Sunak. Covid hit within weeks of him becoming chancellor. He thought he would now be in a position to start implementing the sorts of long-term policies aimed at stimulating growth and enterprise that he set out in his recent Mais lecture. Instead, he has to deal with a whole new crisis.
Inflation is heading to 8% and, according to the Bank of England, possibly considerably well beyond that. Combine that with earnings rising less quickly than prices, a big tax hike coming in next month, and benefits going up by only 3.1%, and you have the ingredients for the biggest year-on-year fall in household incomes in a generation. Even after the £9bn package that Sunak announced in February, people on average incomes could well be more than £800 worse-off next year than this.
