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NEF - Inflation bites Brexit Britain: Squeeze on households continues

Costs continue to outstrip wages for majority: real wages haven’t recovered to pre-crisis levels, and evidence shows households are cutting back on all but essential spending.

Britain’s Brexit economy is on shaky ground: non-food high street sales are at a six year low and any further currency shocks will lead to additional costs for debt-laden households.

Urgent action needed to protect worst-off: rising inflation must be matched with efforts to raise wages and reduce living costs, from housing to energy.

In response to today’s updated inflation figures, which remain at a three year high, Laurie Macfarlane, Senior Economist at the New Economics Foundation, said:

“Inflation remains at a three year high, putting Britain’s households under continued pressure.  Millions are struggling under record levels of debt. People’s real incomes still haven’t recovered from the financial crisis because of low wage growth and high living costs and those on low incomes are suffering the most.”

“Today’s figures are a stark reminder of the reality – rising living costs, debts, a sharp decrease in consumer spending and growing risk of stagflation.”

“If sterling continues to fall during the course of Brexit negotiations, it will be households who pay the price. The government must meet today’s inflation rise with a commitment to increase wages and renewed efforts to reduce living costs, from municipal energy projects that will cut bills, to boosting community-led affordable housing.”

Notes to editors

  1. The New Economics Foundation is the UK’s only people-powered think tank. The Foundation works to build a new economy where people really take control. www.neweconomics.org
  2. All comments in response to the ONS UK consumer price inflation update, released 11 April 2017 https://www.ons.gov.uk/releases/ukconsumerpriceindicesmar2017
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