Cost of living latest: is April ‘the cruellest month’?
April is the cruellest month, a poet famously once wrote, perhaps contrasting nature joyfully reborn with his own sad state. On behalf of our clients and the community we can look at the cost crisis both ways – try anyway!
Consumer price inflation fell slightly in March but is still in double figures (10.1%) and still huge on housing and food (19.2%). Income tax thresholds stay frozen in cash terms meaning real terms increases and lower take-home pay. Council tax is up (though thankfully less in E&E than elsewhere). The cost of renting a home shows no sign of Spring warming at all.
There is some relief, however, if not joy.
The Energy Price Guarantee continues until the end of June. Benefits rise by 10.1%; this will help low- and some middle-income families cope with, but not fully compensate for, developments of the past 2 years; it also applies of course to the state pension. National minimum and national living wages levels go up by 9.7%. People entitled to certain benefits or tax credits should automatically receive new cost of living payments. Our advisers can help if this doesn’t happen.
National Citizens Advice worries a debt crisis could grow from the cost crisis. Among our clients council tax and rent arrears are the most common debts. They aren’t alone. National CA estimates 1 in 10 adults in England and Wales owes their council money, while increasing rents are a present and worsening feature of the housing market. Unfortunately, some clients are in difficulty with both bills and often with several utilities too.
Renting has been a focus of our campaigning this month, while food price inflation remains the most immediate worry. The April consensus is inflation slowing significantly by the summer, but we’re also hearing quite a lot about it proving ‘more stubborn’ than hoped.
This item appears in the CAEE April Newsletter.