Reeves has big problems – mortgage rates pain, food costs rise AND tax hikes – inflation is last thing she needs
WHEN voters feel the cost of living starts to bite, politicians tend to get it in the neck.
So the unexpected jump in inflation is more than unhelpful for a government already facing public anger over various tax rises.
It presents two immediate problems for Rachel Reeves:
The first is that families’ trips to the shops are getting more expensive, especially given the spike was driven by increased food prices.
It also means the Bank of England is now less likely to cut interest rates, meaning mortgage costs could remain higher for longer.
Both will take a direct strain on the finances of millions of Brits trying to make ends meet – many will have voted Labour last July on the promise of an easier ride.
Ms Reeves’ will be all-to aware of the political danger rising inflation can inflict: just ask the Tories who took the blame for soaring prices in the wake of Russia’s invasion.
Throw this in with next-to-no growth, and some critics are even starting to murmur about “stagflation” – the toxic combination of a flatlining economy and rising inflation.
Taxes are rising, inflation is rising, cuts are on the way, and growth is going nowhere fast.
The only thing growing at speed is the country’s eye-watering benefits bill – set to hit £100billion for sickness payments alone by 2030,
The Government spin machine is out in full force softening the blow: Ms Reeves herself legitimately pointing to rising wages outstripping inflation.
But in the cut and thrust of politics – when so much is also about one’s perceived competency – having highest inflation in 10 months is only ever a bad thing.
Three million Brits on benefits have no requirements to seek work
By JACK ELSOM, Chief Political Correspondent
MORE than three million benefit claimants have zero requirements to look for work – a threefold increase in just a few years.
Welfare Secretary Liz Kendall last night slammed the drain on our economy and vowed to rein in the eye-watering bill with an imminent crackdown.
New stats show 3.1million people on Universal Credit handouts are not compelled to seek a job, essentially confining them to a life on the dole.
That is up from 742,128 since February 2020, marking a staggering 319 per cent increase in that time.
A total 7.5million are claiming Universal Credit, up from 2.9million in February 2020 and largely driven by more people being signed off sick.
Sickness benefits alone are projected to cost taxpayers £100billion a year by 2030, up from £60billion today.
Pledging reforms “within weeks”, Ms Kendall said: “Many sick and disabled people tell us they want to work with the right support.
“But for too long they’ve been denied a fair chance to get jobs.“This is bad for people’s incomes and health.
“Potential is being wasted, businesses are missing out on untapped talent, and our economy is suffering.”