Last month, the cost of living continued to rise, highlighting the problem facing the chancellor ahead of his spring budget statement on Wednesday.
Fuel, electricity, and food costs skyrocketed, causing prices to rise by 6.2 per cent in the year to February, the fastest rate in 30 years.
As household budgets are stretched, Chancellor Rishi Sunak is under increasing pressure to provide greater assistance.
Prices are rising faster than salaries, according to the Bank of England, which predicts double-digit growth this year.
When Mr Sunak reveals his spending plans at midday today, there is speculation that he will reduce fuel duty, increase benefits, and raise the national insurance threshold.
Inflation refers to the rate at which prices rise. The inflation rate is 5% if the price of a bottle of milk increases by 5p.
Prices have been rising at their fastest rate since the 1990s since December last year. When the energy price ceiling is lifted in April, inflation is projected to skyrocket.
In England, Scotland, and Wales, this will increase the average home fuel cost by £693 per year, while a projected increase in national insurance will also put pressure on household budgets.
According to the Office for National Statistics (ONS), gas prices were roughly a third higher in February than a year earlier, and electricity costs were nearly a fifth higher.
Prices for a wide range of products and services, from food to toys and games, have risen, according to Grant Fitzner, chief economist at the Office for National Statistics (ONS).
Firms have faced greater energy, shipping, and payroll costs as pandemic restrictions have been lifted around the world, which they have passed on to consumers.
Oil and other commodity prices have risen as a result of Russia’s invasion of Ukraine.
Andrew Selley is the CEO of Bidfood, one of the major food wholesalers in the UK, which serves over 45,000 caterers and food businesses.
Mr Selley added that the price of diesel had increased by 40% over the previous year and that “if I look at our energy pricing, it’s up by 250% over last year, and those two items together make up over 10% of our entire costs.”
