UK Faces Ongoing Cost of Living Crisis

a { color: #880000 !important; background: #ffeeee !important; } UK Faces Ongoing Cost of Living CrisisFinance > EconomyAs inflation rises again, the UK grapples with a cost of living crisis, with essentials at record highs. Nearly a million more people fell into poverty in 2022/23, prompting the Labour government to address economic inactivity and prepare for a challenging budget in October.

What's happened

As inflation rises again, the UK grapples with a cost of living crisis, with essentials at record highs. Nearly a million more people fell into poverty in 2022/23, prompting the Labour government to address economic inactivity and prepare for a challenging budget in October.

Why it matters

What the papers say

According to The Independent, inflation in the UK has risen to 2.2% as of July 2024, a slight increase from June's 2% target. This ongoing inflationary pressure has led to a significant rise in poverty levels, with nearly a million more people classified as living in poverty compared to the previous year. The Labour government, under Work and Pensions Secretary Liz Kendall, is focusing on reducing economic inactivity as part of its strategy to combat the cost of living crisis. In contrast, Sky News highlights criticism from former Conservative leader Ruth Davidson, who argues that Chancellor Rachel Reeves is attempting to create a political narrative to justify potential tax increases and spending cuts. Davidson asserts that the financial challenges were known prior to the election, suggesting that the Labour government is using the situation as a pretext for its fiscal policies. The Guardian emphasizes the urgency of addressing the two-child benefit cap, which many MPs and campaigners argue keeps hundreds of thousands of children in poverty. The Child Poverty Action Group estimates that lifting this cap could significantly reduce child poverty, yet the government appears hesitant to act before the upcoming budget. Overall, the situation reflects a complex interplay of economic pressures and political maneuvering, with significant implications for the UK's social fabric and economic future.

How we got here

The UK has been experiencing a cost of living crisis, exacerbated by inflation rates that peaked at 11.1% in October 2022. Recent figures show that inflation reached 2.2% in July 2024, while absolute poverty has increased for two consecutive years, affecting millions.

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