Inflation has hit its highest level in 40 years amid the deteriorating cost-of-living crisis, according to the latest figures from the Office for National Statistics (ONS).
The rate shot up to 9% last month – its highest level since comparable readings in 1982.
Data released by the ONS showed a broad-based hike in prices for everyday goods and services during April, with a significant cause of the increase accounted for by the unprecedented 54% increase in the energy price cap, which kicked in at the start of the month.
The highest prices on record for both petrol and diesel were other major factors.
Commenting on the data, Rain Newton-Smith, Chief Economist at the Confederation of British Industry (CBI), said:
‘Inflation was always likely to hit hard in April given the energy price cap increase.
‘Looking ahead, inflation is likely to stay high, with a resulting historic squeeze in households’ incomes and a tough trading environment for businesses.
‘It is critical the government explores options to help people facing real hardship now, and support cashflow for vulnerable firms. Stimulating business investment is also crucial, to both plug the near-term gap in growth and to shore up the economy’s potential to withstand future shocks.’
Internet link: ONS website CBI press release
There are now more than a million workers missing from the workforce compared to pre-pandemic figures, according to a report published by the IPPR think tank.
About 400,000 of these are no longer working because of health factors relating to the pandemic, including long Covid, according to the IPPR.
The report suggests that unresolved, this ‘will drag down economic activity this year by an estimated £8 billion’.
The nation’s health affects the economy in more ways than keeping workers away from their jobs. Poor health can affect productivity and promote chronic stress. Inhabitants of economically deprived areas of the country show poorer health, have fewer job opportunities and tend to be paid less.
Dame Sally Davies, co-chair of the Commission on Health and Prosperity, said:
‘A fairer country is a healthier one, and a healthier country is a more prosperous one. While the restrictions have eased, the scars of the pandemic still remain deep on the nation’s health and our economy.
‘Not only are we facing a severe cost of living crisis, driven in part by pandemic induced inflation, we’re also experiencing a workforce shortage driven by poor health that’s holding back the economy. It has never been more important to put good health at the heart of our society and economy – and our commission will bring forward a plan to do just that.’
Internet link: IPPR website
Data published by the British Chambers of Commerce (BCC) shows that UK export growth has been effectively stagnant for the past year.
The BCC’s quarterly Trade Confidence Outlook revealed that the proportion of exporters reporting increased overseas sales was 29%, whilst 25% reported a decrease.
Manufacturers were more likely to report increased export sales than business-to-business firms or business-to-consumer firms (such as online stores), the data showed.
William Bain, Head of Trade Policy at the BCC, said:
‘UK exporters are facing the headwinds of higher red tape costs from trading with the EU, raised raw material pressures and ongoing issues in global shipping markets.
‘If we are to realise the aspirations of the UK government’s Export Strategy then 2022 has to be the year where these structural factors holding back our exporters are addressed.
‘Sustained export growth should be powering our economic recovery from the pandemic.’
Internet link: BCC website
HMRC has launched a new one-stop online shop designed to provide taxpayers with information on the tax reliefs and financial help available from HMRC.
In a new section of the GOV.UK website, HMRC has listed financial support available to ensure individuals are not missing out. There is guidance on relief for childcare and work-related expenses, as well as information about savings and getting help if you cannot pay your tax bill.
The shop is designed to make it easier than ever for taxpayers to claim the benefits, credits and allowances they are entitled to. HMRC has provided online guidance and tools to permit people to check if they are eligible for each relief.
Myrtle Lloyd, Director General for Customer Services at HMRC, said:
‘We understand these are very difficult times for many so it’s vitally important we continue to highlight the range of support available.
‘We’d encourage those who think they may be eligible for support to take a look and claim what they’re entitled to – it could make an important difference to household budgets at a time when it’s needed the most.’
Internet link: GOV.UK
HMRC has started to recover overpayments of Self-employment Income Support Scheme (SEISS) grants.
From April, HMRC is writing to taxpayers whose entitlement to the fourth or the fifth SEISS grant has reduced by more than £100 to ask them to repay amounts that were overpaid.
Entitlement to the fourth and fifth SEISS grants can be affected by an amendment to a tax return. HMRC’s letters include an assessment and a date by which you must make the repayment. If the payment is over 30 days late, a late payment penalty of 5% of the unpaid tax will be applied.
Even if you do not receive a letter, you must tell HMRC within 90 days if an amendment to a tax return affects your entitlement.
Anyone who needs to repay grants can make use of HMRC online tools to help them calculate what they owe. Individuals who receive a letter from HMRC are required to use the payment reference beginning with X when making their repayment.
If you are not able to pay in full, you may be able to set up a Time to Pay arrangement with HMRC.
Internet links: GOV.UK