Rising inflation underlines scale of Andy Burnham’s cost of living challenge

PM’s plan to shield households from more pressure risks being overwhelmed by wider price rises July’s increase in inflation, to 2.9% , is likely to be the first of several, underlining the challenge facing Andy Burnham in shielding consumers from a fresh cost of living squeeze this autumn. Rising energy bills, as an increase in Ofgem’s quarterly price cap came into force, were the main driver of the jump in inflation, from 2.6% in June. That was partly offset by cheaper fuel prices – the knock-on effect of hostilities easing in the Middle East, after Donald Trump hailed his “memorandum of understanding” with Iran in June. However, fuel prices have risen again in recent weeks as hopes of a permanent end to the conflict faded, and another increase in the Ofgem price cap for household energy bills in Great Britain is expected in October. Burnham’s early decision as prime minister to cut VAT from electricity bills will help to ease the pressure on budgets, but it risks being overwhelmed by wider price rises.

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