As inflation hits 9 percent, the Chancellor of the Exchequer, Rishi Sunak, told the Confederation of British Industry (CBI) dinner that “the next few months will be tough.”
The Chancellor addressed the annual CBI dinner the same day as the Bank of England revealed the UK now has the highest rate of inflation for over four decades.
The speech came as anger grows over the impact of the cost of living increases on low income households. There is also recognition of the effect it is starting to have on commerce, with the risk of smaller businesses facing financial hardship and even bankruptcy.
As reported by Reuters, the Chancellor also said “Our role in government is to cut costs for families. I cannot pretend this will be easy.” He added there was not one simple act that Government could take to address the situation.
Some reasons for high inflation are unique to UK
It is widely accepted that there are a number of factors that have played a part in the creation of the unique economic environment that the UK currently is experiencing. These include – but are not limited to – the global supply chain issues brought on by both the Covid 19 pandemic as well as the war in Ukraine, rising energy costs, and the drop in value of Sterling. Another major factor is due to the changes to trade brough on by Brexit.
There are ongoing concerns across industries throughout East Anglia and Nationally that the crisis is far from over.
While the East of England is comparatively affluent, there are still pockets of deprivation in larger towns and coastal areas where 30-40 percent of children live in poverty.
Inflation rises but benefits are static
Reacting to the latest inflation figures, Rebecca McDonald, Senior Economist at the Joseph Rowntree Foundation said, “Inflation has hit a 40-year high. Yet last month, with prices already climbing, the Chancellor chose not to uprate benefits in line with inflation, leaving the basic rate of benefits at its lowest for 35 years. Cuts and freezes to our social security system over the last decade left millions of families on low incomes struggling with the cost of living long before this crisis hit. Now, as the price of essentials like food and energy continue to soar, the Chancellor’s inaction will make an already desperate situation for many even worse.”
The annual CBI dinner is billed as a time when over five hundred guests including business leaders from family run businesses to senior leaders of FTSE 350 companies come together to build relationships and listen to prominent business and political speeches.