Cost of Living
The question
To ask the Chancellor of the Exchequer, if she will make an assessment of the potential implications for her fiscal policies of trends in the cost of (a) groceries and (b) other household bills.
Answered by Lucy Rigby
The Government understands that increased costs in essential areas such as groceries and household bills are causing hardship for many families. The best way to help with the cost of living is by reducing overall inflation. The Chancellor has asked departments to prioritise reducing inflation when developing policies
The Bank of England has the responsibility of controlling inflation, and the Government fully supports them as they take action to sustainably return inflation to 2%. The independent Monetary Policy Committee has cut Bank Rate five times since August 2024. Falling interest rates mean someone with a new representative fixed rate mortgage now pays £90 a month less than they would have before the election.
The Government is supporting households with targeted measures to ease pressure on budgets. This includes increasing the Universal Credit Standard Allowance, extending the Household Support Fund with £1 billion a year for crisis support through councils, and expanding Free School Meals to all children with a parent on Universal Credit from 2026. On energy, the Warm Home Discount will be expanded to cover around 6 million households, and from this winter pensioners with incomes up to £35,000 will also receive a Winter Fuel Payment.
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