Do you feel better off since Rachel Reeves became Chancellor?
If the answer is No, then Labour faces a shellacking in the May local elections.
The most worrying aspect of the surprise 3% hike in inflation is that everyday items are getting more expensive. Meat, eggs, bread and cereals are not luxuries but staples of the weekly shop.
While some workers have enjoyed bumper pay packets, millions of people are simply left with less spare cash.
Mortgage-holders will have groaned at the latest inflation figures. The Bank of England is going to be even more hesitant about cutting interest rates if inflation is soaring far above the target rate of 2%.
The worst is yet to come, with inflation expected to hit 3.7% in the summer and another surge in energy costs anticipated.
Britain is also braced for the £25billion increase in employers’ National Insurance contributions. If businesses respond by putting prices up further and letting workers go then life will get tougher for Britons – many of whom feel that the cost of living crisis has never ended.
The nightmare scenario is that Britain gets trapped in “stagflation” – a horrendous combination of high inflation, low or no growth and increasing unemployment.
The Office for Budget Responsibility is widely expected to slash its growth forecast when it reports on March 26. If the Chancellor forced to start cutting away at public spending then the sense will deepen that Britain has become a grimmer place under Labour.
Already, the public think Sir Keir Starmer is doing a worse job than every prime minister since Margaret Thatcher with the exception of Liz Truss, according to YouGov.
Lady Thatcher understood the full dangers of inflation. In her 1980 conference speech she warned: “Inflation destroys nations and societies as surely as invading armies do. Inflation is the parent of unemployment.
“It is the unseen robber of those who have saved.”
Right now, Sir Keir has to worry about both invading armies in Europe and inflation at home. He faces the challenge of funding an upgrade of the armed forces when there is scarcely enough cash to stop creaking public services from collapsing.
This is why the success or failure of this government will hinge on whether it can ignite growth. The economy grew by a mere 0.1% last quarter of 2024.
Britain will never be a target for investment if the country is notorious for high tax, outlandish energy costs, lousy infrastructure and red tape.
Restoring the UK’s competitive edge should be a national obsession for the PM. At the very least, Sir Keir should resolve not to make things worse.
