Brits are being hammered yet again as inflation shoots up with critics blasting Labour’s “reckless” tax raids for piling pain onto hard-pressed families.
Fresh figures from the Office for National Statistics show prices soared by 3.8% in July, up from 3.6% in June – and above analysts’ gloomy forecasts.
The jump has been linked to Chancellor Rachel Reeves’s Budget bombshell last year, when she hiked National Insurance contributions and forced through higher minimum wage costs for employers. Firms have responded by whacking up prices, leaving ordinary shoppers to pick up the tab.
Shadow chancellor Mel Stride tore into Reeves, warning:
“Labour’s choices to tax jobs and ramp up borrowing are pushing up costs and stoking inflation – making everyday essentials more expensive. And with leading economists warning that the Chancellor has blown a colossal black hole in the public finances, families and businesses are bracing for yet more pain come the Autumn Budget.
Families are paying the price for Rachel Reeves’ economic mismanagement. Britain can’t afford Labour.”
Holidays and groceries hit
ONS said spiralling transport costs, with air fares surging as families tried to jet off for summer holidays, were one of the culprits. Food inflation also leapt, hitting 4.9%, the worst since Covid, driving up the price of staples such as meat, chocolate, fresh juice and coffee. Hotels jacked up rates too.
In The Telegraph, ICAEW’s economics boss Suren Thiru slammed the government’s tax hikes, saying:
“Increasing services inflation suggests that rising National Insurance and national living wage costs are exacerbating underlying price pressures by more than offsetting the current downward squeeze from looser labour market conditions.”
Reeves shrugs
Despite the dire data, Reeves insisted there was “more to do” but claimed her tax-and-spend agenda was the right one. However, the grim figures leave the Bank of England in a bind. Hopes of another rate cut to ease pressure on borrowers have been dashed, with markets now betting rates will stay higher for longer.
ONS chief economist Grant Fitzner confirmed:
“The main driver of inflation was a hefty increase in air fares, the largest July rise since collection of air fares changed from quarterly to monthly in 2001… The price of petrol and diesel also increased this month, compared with a drop this time last year.”
Markets reacted instantly – the FTSE 100 slipped 0.1% to 9,177.37 while the FTSE 250 fell 0.3% – as traders braced for more bad news.
For millions of families, however, the reality is already clear: Rachel Reeves’s so-called “stability” means soaring bills, higher taxes and no relief in sight.
