Cost of living fears grow as latest inflation data to be revealedon October 18, 2022 at 9:04 pm

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The latest price rise figures for September are due as a survey for the BBC suggests concern is rising.

Young couple using computer and doing paperworkImage source, Image Source/Getty Images

The rate at which prices rose in September is due to be revealed as a survey for the BBC uncovers growing concern about the squeeze on finances.

Over half (56%) of those asked expect their finances to worsen in the next six months, up from 30% in a similar survey by Savanta Comres in January.

As a result, nine in ten of those polled are saving money by delaying putting on the heating.

People are also cutting back on clothes spending and taking fewer day trips.

Energy, food and fuel dominate concern about increasing costs, the survey of 4,132 people suggests.

The cost of living is currently increasing at nearly its fastest rate in 40 years, driven by sharp price rises in energy and food costs.

Food and energy prices have been going up around the world following Russia’s invasion of Ukraine which has disrupted production and exports, as well as helped push up prices at supermarket tills.

On Wednesday, the latest inflation figures – which chart the monthly rise in prices – will be published. These are usually used to calculate next April’s rise in the state pension and the increase in some benefits.

Disability benefits such as the personal independence payment, as well as carer’s allowance, are among the payments that are legally required to go up in line with inflation.

But debate still surrounds the government’s position on whether the biggest working age benefits will rise in line with prices, or follow the lower increase in wages. They have not gone up at the same rate as inflation for nine out of the past 12 years.

Included in those is universal credit which is claimed by 5.7 million people.

During his deconstruction of his predecessor’s mini-budget earlier in the week, Chancellor Jeremy Hunt said that “difficult decisions” would be made on tax and spending.

However, he said that the priority would be to protect the most vulnerable.

Ministers had previously committed to raising the state pension under the triple-lock system, although that too is now in doubt. The basic pension is currently £141.85 a week, or £185.15 for the new state pension. This will go up in line with the highest of inflation, wages, or 2.5% – of which inflation will be by far the largest.

The survey was conducted earlier this month before Mr Hunt reversed some tax cuts, said support on energy bills would be limited for some, and warned of further government spending cuts.

Bushra sat on a sofa wearing a headscarf and cardigan

Bushra can no longer afford gym membership, so attends free sports sessions at her local community centre.

The rising costs of living means plans for a stairlift for her disabled daughter have been put on hold, as it would have cost thousands of pounds.

“I’m unable to work at the moment but the electric bill is really high,” she says. “I’m constantly having to explain to the children to close doors, or else we will lose heat. Children sometimes just don’t understand.”

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A spokesman for the Treasury said the government had reversed the rise in National Insurance and made changes to help people on universal credit.

“Countries around the world are facing rising costs, driven by Putin’s illegal war in Ukraine, and we know this is affecting people here in the UK,” he said.

“That is why we have taken decisive actions to hold down bills this winter through the Energy Price Guarantee and provided at least £1,200 of additional cost-of-living support to eight million of the most vulnerable households.”

Under the original Energy Price Guarantee, announced last month, the price per unit of energy was capped for two years – meaning the average bill would be £2,500.

Now that will only be in place for six months, just to cover this winter. The Treasury will review support given from April, but Mr Hunt said there would be “a new approach” targeting those in the most need.

Adam Scorer, chief executive of National Energy Action, said: “Who will still get support? Will it include vulnerable households not on welfare benefits? Will that support be deeper for those in greatest need?

When it was announced, many had criticised the energy scheme for not being targeted enough, arguing the support should have been means tested.

The Institute for Fiscal Studies (IFS) think tank welcomed Mr Hunt’s decision.

“While large-scale untargeted support for households this winter was perhaps unavoidable we need to do everything possible to put in place a better designed, better targeted and less expensive scheme next year,” said IFS director Paul Johnson.

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