Five cost of living crises facing the UK government | Politics
1 Gas price
The cost of natural gas has quadrupled in four months, but energy companies cannot pass the increase on to their customers as prices are capped by the government. The price cap will rise by an average of £ 139 in October, but dozens of smaller suppliers are set to close their doors. When the cap is revised in April next year, it could rise by £ 200 or more, some analysts say. Gas prices are unlikely to drop for months, so heavy industry companies will face higher costs and the UK is no longer part of the EU energy market. which allows simple cross-border energy trade to keep prices more stable.
2 Universal credit
Ministers plan to reduce the Covid boost of £ 20 to the basic payment of £ 118 per week of universal credit (UC) on October 6. Income tax, national insurance and the UC reduction which means claimants only get 37 pence for every £ 1 earned – as little as £ 2.24 per hour – meaning one person working out full-time at minimum wage should find about a day of extra work each week. to fill the gap, according to the Resolution Foundation, pushing 800,000 into poverty.
A potential backbench revolt forced ministers to consider other options, but plans to change the UC cone would mean the £ 6bn cut would only be reduced to £ 5bn .
The combination of product shortages, labor shortages and rising energy prices will combine to push inflation above 4% for the first time since 2013, according to the monetary policy committee from the Bank of England. In March, the rate stood at 0.7%.
Interest rates remain at a historically low 0.1%, but even a small increase could be devastating for millions of people – the average debt burden per household is £ 62,705, according to Money Charity.
Lack of delivery and truck drivers, as well as other workers in warehouses and food processing plants has resulted in product shortages on supermarket shelves and in diesel and gasoline supplies. . Inventory levels at retailers are at their lowest since 1983, and import levels plunged, down 17% in August according to the Confederation of British Industry. Business confidence had risen amid optimism about a post-Covid recovery, but CBI chief executive Tony Danker said yesterday the mood had “shifted from growth to adaptation”.
The pandemic leave scheme ends Sept. 30 and between 1.3 and 1.7 million remain on full or partial leave, according to ONS figures. Companies will either lay off workers on leave or have to reinstate them in their workforce.
Demand for workers is at an all time high, with 223,000 new job vacancies posted in the week ending September 19, according to the Confederation for Recruitment and Employment. But even with a labor shortage, there is likely to be a mismatch between the newly unemployed and their skills for available jobs.