London Daily

Focus on the big picture.
Thursday, Feb 19, 2026

Rishi Sunak warns of tough few months as inflation soars

Rishi Sunak warns of tough few months as inflation soars

Chancellor Rishi Sunak has warned the next few months "will be tough" after it was revealed prices are rising at the fastest rate for 40 years.

In a speech to businesses, he said the government was "ready to do more" to help households facing soaring energy, fuel and food costs.

He also said he would cut taxes for businesses to encourage them to invest.

It comes as a think tank said the poorest were being hit hardest by steep rises in energy bills.

UK inflation jumped to 9% in the 12 months to April, up from 7% in March and the highest level it has reached since 1982.

Inflation is the rate at which prices are rising. For example, if a bottle of milk costs £1 and that rises by 9p, then milk inflation is 9%.

April's jump in inflation came as millions of people saw an unprecedented £700-a-year increase in energy costs last month.

At the annual CBI dinner, the chancellor told businesses the economic situation was "extremely serious", with the country facing "a perfect storm of global supply shocks", including the impact of the war in Ukraine and lockdowns in China.

"There is no measure any government could take, no law we could pass, that can make these global forces disappear overnight," he said.

"The next few months will be tough. But where we can act, we will."

However, he added that he "cannot pretend" it will be easy to cut costs for families.

Mr Sunak also called on businesses to boost investment and training in order to grow the economy and help ease the cost of living crunch.

"And as I've said previously, our firm plan is to reduce and reform your taxes to encourage you to do all those things," he said.

"That is the path to higher productivity, higher living standards, and a more prosperous and secure future."


Around three quarters of the rise in inflation in April came from higher electricity and gas bills, according to the Office for National Statistics (ONS).

A higher energy price cap - which is the maximum price per unit that suppliers can charge customers - kicked in last month, meaning homes using a typical amount of gas and electricity are now paying £1,971 per year on average.

Fuel prices have also surged, with the RAC motoring group warning on Wednesday that petrol and diesel prices have hit new records of £1.68 and £1.81 per litre respectively.

The prices of most other goods and services have risen as well, the ONS said, while wages are failing to keep pace with inflation and falling in real terms.

Up until now households of all incomes had faced similar rates of inflation, but the poorest are now being hit hardest by rising prices because they have to spend far more of their household budgets on gas and electricity, the Institute for Fiscal Studies said.

Retail Economics, a research consultancy, said the poorest people were experiencing a drop of £59 per month in their discretionary spending budgets compared to this time last year.

Citizens Advice said "the warning lights could not be flashing brighter" and the government needed to offer households more support.

"There are desperate stories behind these figures," Dame Clare Moriarty, the charity's chief executive, said. "People washing in their kitchen sinks because they can't afford a hot shower; parents skipping meals to feed their kids; disabled people who can't afford to use vital equipment because of soaring energy bills."


'I can't do much more'



Health analyst Cheryl Holmes, a mother-of-two, said she was trying to keep her living costs "as low as possible" by spending less on food and clothes, and cancelling TV subscriptions.

"I've already for several years been turning the lights off in each room, setting the heating on a timer, making sure I'm using a full dishwasher and washing machine and I'm running out of ideas.

"It's a battle and it seems like there's not really much more that I can do."


UK inflation is simply not supposed to hit levels this high. And as the Bank of England Governor Andrew Bailey has said, these sorts of rises hit the poorest the hardest.

9% is an average across the population. The older Retail Prices Index measure is already at 11%.

But Mr Bailey's institution has a battle on now to get this under control. The really painful issue is that this rate will sustain and is on course to get higher over the course of this year.

And only this week he acknowledged that there was "not a lot" the Bank could do about four-fifths of the anticipated rise, as it is being imported from globally rising prices for energy and food.

The Bank of England has warned the UK's cost crunch could leave the country on the brink of recession, with inflation peaking at over 10% later this year due to further expected rises in energy bills.

The rising cost of living is already seeing people spending less money and cutting down on car journeys due to high fuel costs. And it is impacting the economy, which shrank in March.

The Bank has raised interest rates four times since December to try to cool prices, but MPs have accused it of not doing enough.

This week Governor Andrew Bailey defended its response, insisting inflation was being driven by global forces that limited the Bank's room for manoeuvre.

However the UK now has the highest rate of inflation (9%) of any G7 country, including Germany (7.4%) and France (4.8%).



Kate Worby and Charlie Skudder say they have already stopped socialising and going out for meals


Newsletter

Related Articles

0:00
0:00
Close
UK Inflation Slows Sharply in January, Strengthening Case for Bank of England Rate Cut
Hide the truth, fake the facts, pretend the opposite, Britain is as usual
Viktor Orbán getting massive praise for keeping Hungary safe, rich and migrant-free!
UK Inflation Falls to Ten-Month Low, Markets Anticipate Interest Rate Cut
UK House Prices Climb 2.4% in December as Market Shows Signs of Stabilisation
BAE Systems Predicts Sustained Expansion as Defence Orders Reach Record High
Pro-Palestine Activists Cleared of Burglary Charges Over Break-In at UK Israeli Arms Facility
Former Reform UK Councillors Form New Local Group Amid Party Fragmentation
Reform UK Pledges to Retain Britain’s Budget Watchdog as It Seeks Broader Economic Credibility
Miliband Defends UK-California Clean Energy Pact After Sharp Criticism by Trump
University of Kentucky to Host 2026 Summer Camps Fair Connecting Families with Local Programmes
UK Police Forces Assess Claims Jeffrey Epstein Used Stansted Airport Flights in Trafficking Network
UK-Focused Equity ETF FLGB Climbs to Fresh 52-Week Peak on Strong Market Sentiment
Trump Warns UK’s Chagos Islands Agreement Is a “Big Mistake” Amid Strategic Security Debate
Trump Urges UK to Retain Sovereignty Over Diego Garcia Amid Strategic Concerns
Italian Police Arrest Man After Alleged Attempt to Abduct Toddler at Bergamo Supermarket, Child Hospitalised With Fractured Femur
Rupert Lowe wanted to deport rape gangs and the communities who protected them
Reform UK Appoints Former Conservative Minister Robert Jenrick as Finance Chief
UK Unemployment Rises to Highest in Nearly Five Years as Labour Market Weakens
Rupert Lowe Advocates for English-Only Use in the UK
US Successfully Transports Small Nuclear Reactor from California to Utah
South Korea's traditional sand wrestling sport ssireum faces declining interest at home
Japan outlawed Islam
Virginia Giuffre accuses Epstein of trafficking to powerful men for blackmail.
New Mexico lawmakers initiate investigation into Zorro Ranch linked to Jeffrey Epstein
British Tourist Arrested at Hong Kong Airport After Meltdown and Vandalism
The Spanish government has ordered prosecutors to investigate platforms X, Meta and TikTok for allegedly spreading AI-generated child sexual abuse material
European Commission Plans Purchase Incentives Limited to Vehicles Manufactured Largely in the EU
French District of Pas-de-Calais Introduces Immediate License Suspension for Drivers Using Mobile Phones
Volkswagen Targets €60 Billion in Cost Reductions as Sales Decline and Global Pressures Intensify
Nigel Farage Names Reform UK Frontbench Team and Signals Zero Tolerance for Internal Dissent
Qualcomm to Withdraw UK Lawsuit Over Smartphone Chip Royalty Dispute
Major UK Banks Explore Domestic Card Network to Rival Visa and Mastercard
Cold Health Alert Issued Across UK as Temperatures Drop Sharply
Nine-Year-Old Becomes First Child in UK to Undergo Groundbreaking Leg-Lengthening Surgery
UK Workers Face Stagnant Incomes and a Softening Labour Market as Unemployment Climbs
UK Passport Rules Tightened for British Dual Nationals Under New Travel Guidance
California Deepens Global Climate Alliance with New UK Pact and Major Clean-Tech Investment Drive
UK Supreme Court Tightens Rules on Use of ‘Milk’ and ‘Cheese’ Labels for Plant-Based Products
University of Kentucky Postpones Feb. 19 Law Enforcement Training Exercise in Lexington
‘The only thing illegal is Keir Starmer handing these islands to a country like Mauritius!’
JD Vance says Germany is “killing itself” by taking in millions of fake asylum seekers from culturally incompatible nations.
UK Markets Signal Opportunity as Starmer Confronts Intensifying Political Pressure
Trump Criticises Newsom’s UK Climate Pact, Defends Federal Authority Over Foreign Engagements
UK’s Top Prosecutor Says ‘No One Is Above the Law’ as Police Review Claims Against Ex-Prince Andrew
Businessman Adam Brooks weighs in on the reports that the US is set to help Hamit Coskun flee the UK, over free speech concerns
U.S. Attorney General Pam Bondi Releases 3.5 Million Pages of Jeffrey Epstein Case Files
US Secretary of State Marco Rubio Comment on European allies report blaming Russia for killing late Kremlin critic Alexei Navalny using toxin from poison dart frogs
Eighty-Year-Old Lottery Winner Sentenced to 16.5 Years for Drug Trafficking
UK Quran Burner May Receive Asylum in the US Amid Legal Challenges
×