The cost of living crisis

What’s happening?

triple whammy of soaring energy costs, galloping inflation and tax rises is about to whack UK households, with some economists predicting a cut in real incomes worse than that seen during the financial crisis of 2008. Inflation as measured by the consumer price index (CPI) was 5.1% in the 12 months to November 2021 (up from 4.2% in October, and more than twice the Bank of England’s target rate). The old retail price index measure of inflation is already at 7.1% – one reason why ministers insist it is “no longer an official measure”. On tax, national insurance rises