Britain’s cost of living squeeze intensified further last month, according to official figures showing inflation reached 6.2% in February – announced before Rishi Sunak’s spring statement.
Figures from the Office for National Statistics showed a jump in the government’s preferred measure of the cost of living from 5.5% in January, fuelled by the rising cost of petrol and diesel and a wide range of goods from food to toys and games.
The February inflation figure for the consumer prices index was higher than the 5.9% predicted by a Reuters poll of economists, illustrating the scale of the squeeze on UK households from soaring living costs.
According to the latest snapshot, soaring inflationary pressure was fuelled by rising costs for gas and electricity, as well as average petrol and diesel prices hitting record highs in a blow to motorists.
Prices for clothing, footwear, furniture and flooring all rose after the end of the traditional January sales on the high street, reversing a trend from a year earlier when prices dropped during the third nationwide Covid lockdown when many shops were forced to close.
Business groups and Labour warned that the chancellor needed to take urgent action to address rising living costs in his spring statement. Sunak will announce his set-piece tax and spending update to the Commons on Wednesday afternoon, with expectations that additional support for households will be announced.
Rachel Reeves, the shadow chancellor, said plans to increase national insurance contributions needed to be ditched as part of measures to support workers through the tightest squeeze on living standards for at least three decades.
“As he heads into his spring statement, he can either choose an unfair tax rise on working people and business at the worst possible time. Or he can cancel his tax rise, and ease the cost of living hitting families by cutting energy bills by up to £600 through bringing in a one-off windfall tax on oil and gas producer profits,” she said.
The latest increase in the consumer prices index took the measure of inflation to the highest rate since March 1992, when it stood at 7.1%. Further increases are expected as higher motoring costs triggered by Russia’s invasion of Ukraine and April’s increase in domestic energy prices take effect.
The Bank of England said last week it expected inflation to be about 8% in April with the risk of a double-digit increase in the autumn if there is another sharp increase in the energy price cap.
Reflecting the potential for higher inflation in future, the ONS said the price of goods leaving UK factories had been rising substantially and was now at the highest rate for 14 years.
Matt Whittaker, the chief executive of Pro Bono Economics, said the latest inflation figures meant a typical single parent will face paying out an estimated additional £315 in food and heating this year compared with 2019, while bills for a family of four are likely to jump by £580.
“With inflation driven by staples such as food and fuel, the everyday impacts of inflation will be felt most sharply by the poorest,” he said.