Family food bills could increase by more than £180 next year because of spiking inflation, Labour analysis of official figures has suggested.
According to the Office for Budget Responsibility, inflation in the Consumer Prices Index could rise to over four percent by 2022.
Such a rise would add about £3.50 to the cost of an average family’s weekly food shop, equating to about £183 more over the course of the year.
Labour accused the Government in failing to ‘get into a grip’ over the cost of living crisis. Shadow chancellor Rachel Reeves repeatedly called for ministers to reduce VAT on fuel bills to help families struggling this winter.
Rishi Sunak, the Chancellor, said that he is a ‘cognisant of price inflation’ and that he will act if necessary.
Shadow chancellor Rachel Reeves challenged Rishi Sunak today after Labour analysis suggested the average family food bill could rise by £180 next year because of spiking inflation
The Office for Budget Responsibility predicts inflation above four percent by 2022
Office for National Statistics data for 2019/20 showed an average household with two adults and two children spent about £88 a week on food and non-alcoholic drinks – about £4,586 a year.
Labour said that if CPI inflation hits the OBR’s forecast of at least four per cent, then weekly food bills would increase by approximately £3.50 – about £183 more a year.
Ms Reeves raised the matter during Treasury Questions in the House of Commons today, asking why the Government does not reduce VAT on fuel bills.
The shadow chancellor said: ‘According to the Office for Budget Responsibility, the Government’s supply chain chaos, woefully inadequate post-Brexit planning and a lack of HGV drivers have contributed to higher inflation.
‘The cost of the weekly shop is already going up and up – as the Chancellor will have heard from shoppers in Bury last week.
‘So does the Chancellor have any idea of how much the average weekly supermarket shop is expected to increase in the course of the next year, for a typical family?’
Mr Sunak replied: ‘Well, we are cognisant and aware that there is price inflation and indeed last week’s Budget addressed that and explained to the British people some of the global factors that are behind the rise in prices which are not unique to this country. But as I said, where this Government can act we will.’
Ms Reeves hit back and said: ‘Let me help the Chancellor in the answer to that question. The typical family shop is likely to go up by £180 more next year.
‘And it is not just food prices that are rising. Gas and electricity bills already up by £139 and only going to go up more.
‘The Chancellor had the opportunity in the Budget to help people with their gas and electricity bills by reducing VAT to zero per cent through the winter months.
‘It is something that Labour has called for and that the Prime Minister backed when he was campaigning to leave the European Union.
‘So who should the public blame for VAT on heating bills not being cut? The Prime Minister for not keeping his word or the Chancellor for choosing to cut taxes for bankers instead?’
Sunak stated that numerous organizations had criticised the idea to reduce VAT on fuel bills. He also claimed that it would disproportionately benefit wealthy families.
He added: ‘Instead, we have provided half a billion pounds, targeted at those who need our help.
‘You mention £180. The household support fund will be able to provide £150 to two to three million of the most vulnerable families in our country.
‘Indeed, the national living wage next year is going up which will ensure a £1,000 increase for someone working full time on the national living wage.
Mr Sunak claimed that he is a ‘cognisant, aware’ of price inflation and that he will act ‘wherever this Government can’
‘And because of the cut to the Universal Credit taper, a single mother working full time with two kids renting will be £1,200 better off.
In a report that was published with the Budget last month, the OBR stated that it expects CPI inflation to reach 4.4% next year. The risks around that are tilted to the upside.
It stated that the news since closing our forecast would be consistent in predicting inflation peaking at close-to five percent next year. It could reach the highest rate in the UK in three decades.
OBR stated that the OBR expects that the spike in inflation will be temporary and will return to more normal levels by 2024.
It said: ‘The near-term spike in inflation next year is expected to be relatively short lived, with inflation returning to the two per cent target in 2024, as energy prices stabilise, supply bottlenecks ease, and a modest tightening in monetary policy counteracts the extra stimulus from the fiscal package.’