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Rate reaches 10.4% in February, recovering after recent drops in numbers Covering Childcare Costs on Energy Bills: What Was Announced in Jeremy Hunt's Budget? Inflation rose unexpectedly in February to 10.4%, with food and drink prices again driving the rise, the Office for National Statistics said.
The latest rate of the Consumer Price Index rose from 10.1% in January, reversing the downward trend of recent months. Most economists expected the CPI to fall to 9.9% in February.
Economists said before the announcement that the outlook for government finances remained "still quite gloomy" despite improved forecasts by Britain's fiscal watchdog.
A group of experts has told Parliament's Treasury Committee that households face a "two-year crackdown on living standards" due to rising energy bills and tax hikes.
The Office of Budgetary Responsibility (OBR) further projected a 5.7% decline in real disposable household income per person between 2022/23 and 2023/24.
According to the latest Ipsos survey, the cost of living remains the public's top priority. Although the March numbers have fallen from their peak in August 2022, 39% of those surveyed confirmed that this remains their top concern.
Inflation reached 10.4% last month in a reversal of recent trends, according to official figures. The consumer price index inflation rate rose from 10.1% in January to 10.4% in February, the Office for National Statistics (ONS) said.
The news comes as economists have warned the UK government that Britons face a "two-year crackdown on living standards" due to rising energy bills and tax hikes.
The Office of Budgetary Responsibility (OBR) added that people will face the largest drop in living standards on record, with real disposable income per person in the household expected to fall 5.7% between 2022/ 23 and 2023/23.
Eleanor Noyce follows the ONS announcement:
Economists have warned that Britons face a "two-year crackdown on living standards"
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The outlook for government finances remains "still quite grim" despite an improved forecast from Britain's fiscal watchdog, economists told lawmakers ahead of an inflation update.
The new figures are expected by Wednesday morning.
A group of experts also told Parliament's Treasury Committee that households face a "two-year crackdown on living standards" due to rising energy bills and tax hikes.
It comes after Chancellor Jeremy Hunt promised a big expansion of state-funded childcare and tax breaks for businesses in last week's budget.
The official government forecaster, the Office for Budgetary Responsibility (OBR), also confirmed last week that the UK economy is now on track to avoid a technical recession, meaning two consecutive quarters of decline.
Henry Saker-Clark has the whole story:
It comes after Jeremy Hunt promised a big expansion of state-funded childcare and tax breaks for businesses in last week's budget.
Home sales fell by almost a fifth (18%) in February 2023 from the same month a year earlier, a sign that the property market is slowing, according to HM Revenue and Customs (HMRC).
In the UK, approximately 90,340 homes were sold in February this year, down 4% from January 2023.
The HMRC report states: “Towards the end of last year, mortgage rates and interest rates increased and we are beginning to see the impacts of these changes on these statistics.
"Seasonally adjusted residential real estate transactions appear depressed, indicating a slowdown in the housing market."
The figures were released as financial news website Moneyfacts said average two-year and five-year fixed-rate mortgages fell slightly to their lowest levels in six months.
Vicky Shaw reports:
The number of home sales in February was 18% lower than in February 2022, but there have been recent signs of some mortgage rates falling.
Come March, many Brits will still be looking anxiously at their energy bills and thinking twice before turning on the heating.
Ofgem's energy price cap, the maximum amount that can be charged to average users, will be cut by 23%, from £4,279 in January to £3,280 in April in response to lower retail gas prices. elderly. But campaigners warn that impending changes to government support measures, introduced last year to tackle rising household energy costs, mean many could end up paying more.
Chancellor Jeremy Hunt has announced that the energy price guarantee, introduced by Liz Truss last September to ensure households pay no more than £2,500 for electricity and gas, with the government subsidizing the remainder allowed by the cap would rise to £3,000 next month.
It's a considerably less generous offer and matches a £400 discount introduced by Rishi Sunak a year ago that sold out. That could leave households with £900 out-of-pocket in total, and a cold snap this month is forecast to require heaters to be left on for longer.
The UK inflation rate currently stands at 10.1%, keeping the cost of goods on supermarket shelves high, while the Bank of England's monetary policy committee has raised interest rates. interest at 4%.
Joe Sommerlad details all benefits, pensions and cost of living payments for March:
More state support to come as millions continue to fight
Immigration concerns have risen sharply in the past month, but the cost of living remains the public's top priority, according to a monthly survey.
One in five people told the Ipsos pollster that they thought immigration was one of the biggest problems facing the country in a survey conducted in the first week of March, as the government was preparing to introduce its immigration bill. illegal immigration.
That total represents a 75% increase since February, with the greatest concern among older voters, southerners and those less disadvantaged.
But despite growing concerns about immigration, inflation remains the public's number one priority with 39% of people telling Ipsos it was one of their biggest problems.
Read the full story here:
Worries about immigration rose by 75%, but nearly twice as many people said inflation was a top concern, according to the Ipsos poll.
Martin Lewis has warned that supermarket bills will never go back to what they were, even with gradually falling inflation.
The financial expert explained that a lower inflation rate does not mean that prices are falling, but rather that they will not rise as fast.
Falling prices would actually be a problem for the economy as it would lead to deflation, which can signal an economic downturn and possibly a recession or depression.
The money-saving expert told The Sun: “I don't think prices will ever go back to where they were. If they did, it would cause a problem for the economy because we would have what is called deflation.
“The most important thing is that we reduce inflation and, over time, we expect people's incomes to catch up. But there will still be some difficult years ahead for many people.
The cost of living has soared across the UK in 2021 and 2022. After reaching a 41-year high of 11.1% last October, inflation fell to 10.1% in January, but still represents an increase of 10% compared to the previous January figure.
My colleague Tara Cobham has the whole story:
The cost of living has skyrocketed across the UK in 2021 and 2022, with inflation still extraordinarily high
As spring finally arrives in the UK after a long and hard winter, the pressure on household finances from sky-high energy bills should start to ease in the coming weeks.
The cost of living crisis remains acute, but there was good news for consumers in Jeremy Hunt's March 15 budget, with the Chancellor announcing that the Energy Price Guarantee (EPG), introduced by Liz Truss last September to ensure households pay no more than £2,500 for their electricity and gas - with the government subsidizing the rest allowed by Ofgem's energy price cap - would be extended for another three months.
Hunt was tempted to increase the EPG to £3,000 from April 1, a considerably less generous offer that would have eased the burden on the estate, but eventually thought better of it.
“High energy bills are one of the biggest concerns for families, so we are keeping the energy price guarantee at its current level,” the chancellor told parliament.
"With energy bills expected to drop from July, this temporary change will close the gap and ease the pressure on families, while helping to reduce inflation."
Joe Sommerlad reports:
Three-month extension of energy price guarantee welcome, but key state support schemes expire
European Central Bank President Christine Lagarde said last week that a sharp rise in interest rates was "very likely" at Thursday's meeting. C'était avant que la Silicon Valley Bank ne s'effondre aux États-Unis et que les actions des banques européennes ne plongent alors que les craintes de troubles plus répandus se répandaient à un momento où les banques s'adaptent à la hausse quickly des interest rate.
Markets are watching to see if the ECB will stick to its path of sharp rate hikes to combat inflation or return to a quarter point hike.
Lagarde and the ECB have not made a public statement on the recent banking turmoil, including the plunge in shares of top Swiss lender Credit Suisse and its decision to seek funding from the Swiss central bank this week. ECB officials typically observe a quiet period a week before a rate decision to avoid excessive market fluctuations and speculation based on officials' comments.
David McHugh reports:
Concerns about global banks cast a shadow over the European Central Bank meeting
Workers have been warned they will pay an additional £29.3bn a year within five years as millions more will be forced to pay higher taxes or tax rates for the first time.
Chancellor Jeremy Hunt decided in his budget to freeze personal tax thresholds in monetary terms, rather than increase them in line with inflation.
This creates a "tax brake": when taxpayers are effectively placed in new tax brackets as their wages and inflation rise.
The number of taxpayers in the upper bracket will increase by 47%, according to the Office for Budgetary Responsibility, a financial watchdog.
“Based on our latest forecasts for earnings growth and CPI inflation, these measures are expected to generate 3.2 million (9% more) new taxpayers, 2.1 million (47% more) new taxpayers with higher rate and 0.35 million (47% more) additional rate. taxpayers at the end of the forecast than it would have been if the thresholds had continued to rise with inflation," the OBR experts say in their commentary on the budget.
Jane Dalton reports:
'Stealth' tax will make 5.3 million more people pay taxes or higher tax rates, figures show
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