Labour warns families face cost of living crisis this Christmas as inflation rises

Elliot Chappell
© HASPhotos/

Labour has warned of “price crunches” as UK inflation hits a ten-year high and described the latest economic reports as a “stark illustration of the cost of living crisis facing families this Christmas”.

Responding to the news that inflation hit 5.1% in November, rising at the fastest rate since September 2011 and up from 4.2% in October, Labour’s Pat McFadden said the government was “looking the other way”.

“From the energy price cap going up, soaring food costs and fuel prices hitting another record high – the list of price crunches as inflation continues to rise goes on and on,” the Shadow Chief Secretary to the Treasury said.

“Instead of taking action, the government are looking the other way, blaming ‘global problems’ while they trap us in a high tax, low growth cycle. Unlike the Conservatives, Labour wouldn’t be hitting working people with a tax hike, and as heating bills rise, we’d cut VAT on domestic energy bills now for the winter months, to help ease the burden on households.”

The 5.1% figure relates to the consumer prices index (CPI) measure of inflation, which does not take account of housing costs. The retail prices index (RPI), which is more inclusive and usually higher, rose from 6% to 7.1% in November.

Unite the Union said wage rises should match RPI inflation, highlighting that household costs are expected to rise by £1,700 in 2022. People will otherwise face “a calamitous drop in their standard of living”, general secretary Sharon Graham warned.

The monthly CPI update from the Office for National Statistics (ONS) today showed a higher rise than previously predicted by economists, and is more than double the 2% target for the UK. ONS chief economist Grant Fitzner said a wide range of price rises had contributed to the decade-high inflation figure.

Frances O’Grady argued that many families will “struggle to keep up with basic living costs, let alone Christmas celebrations”, stressing the impact of fuel and electricity price rises and the recent £20-per-week cut to Universal Credit.

The TUC general secretary added: “We need an urgent plan from the government to get real wages rising. Trade unions should have greater access rights to workplaces to negotiate improved pay. The Chancellor must fully fund real pay rises for public sector workers. And the minimum wage should go up to £10 immediately.”

Electricity prices are 18.8% higher than a year ago and gas is 28.1% more expensive, the highest annual rates since early 2009. Motor fuel prices rose 5.1% during the month. Clothing and footwear, food and non-alcoholic beverage prices, and alcohol and tobacco all provided a large upward contribution.

GMB general secretary Gary Smith said people would struggle to “keep their families fed and clothed” as prices continue to rise, adding: “People everywhere are being hit with this cost-of-living crisis, but the lack of any credible energy and industrial strategy from this government is making things worse.”

According to the ONS, the cost of goods jumped by 6.5% per year in November driven by rising demand and supply chain problems following the pandemic. Price rises for services rose at a lower rate, up 3.3% on the previous year.

Resolution Foundation senior economist Jack Leslie warned this morning: “Early 2022 is likely to marked by acute economic pain for some parts of the economy – notably hospitality – alongside a nationwide living standards squeeze.”

Responding to the Budget in October this year, Labour’s Rachel Reeves said Chancellor Rishi Sunak was “loading the burden on working people” with a National Insurance rise, a council tax hike and no support on domestic energy bills.

“Labour would put working people first. We’d use the power of government and the skill of business to ensure that the next generation of quality jobs are created right here, in Britain,” the Shadow Chancellor said.

“We’d tax fairly, spend wisely and after a decade of faltering growth, we’d get Britain’s economy firing on all cylinders. That is what a Labour budget would have done today.”

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