Inflation
The question
To ask the Chancellor of the Exchequer, what assessment has been made of the impact of levels of inflation on the Government’s commitment to (a) deliver growth in every postcode and (b) address the cost of living.
Answered by Treasury
Persistently high inflation increases the cost of living for households, leads to higher borrowing costs, dampens investment and slows economic growth. The Government recognises this and is committed to bearing down on inflationary pressures, supporting growth and cutting the cost of living.
HM Treasury does not produce forecasts of the UK economy. Forecasting the economy, including the impact of Government policy decisions, is the responsibility of the independent Office for Budget Responsibility. The OBR will publish its latest economic and fiscal forecast alongside the Budget on 28 October 2026.
The Government is also committed to giving people breathing space and helping with the cost of living. Removing VAT from domestic electricity bills from 1 October will take around £45 off the annual Ofgem price cap, on top of the £150 removed from bills at the last Budget. A £2 bus fare cap will also apply to single tickets in England outside London from 1 January 2027, helping with the cost of everyday travel.
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