Households still struggling with high food and energy prices ahead of Labour budget

One thing that helped propel Labour into power was the cost of living crisis, and millions of households under financial strain will now be looking to see what Rachel Reeves’s first budget will do about it.

Many households across the UK are still facing the stark reality of high prices.

With just days until Labour’s first budget, there is one big question for many people – will it leave them better or worse off?

Households, of course, have their own budgets, which continue to feel the strain caused by the cost of living crisis.

The reality is pretty stark, as our FactCheck team has been finding out.

Inflation may have fallen to its lowest level in more than three years, but many household essentials are now far more expensive than they were before the cost of living crisis began.

Average earnings have been rising – up 21% between January 2021 and August of this year, according to the Office for National Statistics.

But that hasn’t kept pace with some big household expenses.

Like the price of food at the shops, which rose sharply as the cost of living crisis struck and never fell back down.

By August of this year, food prices were nearly a third higher – 31% – than they were at the start of 2021, according to the Consumer Prices Index measure of inflation.

Then there’s the cost of energy bills. They had more than doubled by October 2022 – up a massive 132%.

They’ve fallen since then but are still far higher than they were – 55% higher this August than at the start of 2021.

Separate analysis by poverty charity the Joseph Rowntree Foundation, shared exclusively with Channel 4 News, gives more detail about the financial strain people remain under.

The average household with a mortgage is paying an extra £2,210 a year in real terms on their housing costs than they were five years ago, in October 2019, its analysis finds.

Working age households claiming benefits are £690 a year worse off than five years ago, while households with one or more disabled person are £190 a year worse off.

All this is crucial background to Labour’s first budget – with people struggling across society wondering whether Chancellor Rachel Reeves will ease those pressures.

Ms Reeves told Channel 4 News: “I hope that what they’ll see in the budget this week is that I’m doing everything in my power, even in these difficult circumstances, to protect working people and improve living standards.”

Words by Claire Wilde