You know Middle England is feeling the pinch when shoppers tweet they have just forked out 81p for a courgette – admittedly from pricey Waitrose – and having to pay £1.75 for a slab of Tesco’s own butter, compared to 89p a few years ago.
It’s also why the latest inflation figures soaring to 9 per cent for the year to April don’t come as any surprise.
While the record figures – the highest for 40 years – are shocking, they merely confirm what most consumers have experienced daily for the last few months.
Action plan: Chancellor Rishi Sunak (pictured) says the Treasury is looking at help for the poorest to pay for heating bills, as well as potential tax cuts in the autumn
Yet there may be some good to emerge from the horror show unfolding, which is that Rishi Sunak and his Cabinet colleagues are finally being bumped into action.
After prevaricating for weeks, the Chancellor is now letting it be known that the Treasury is working on an action plan, one that includes more help for the poorest to pay for their heating bills, as well as potential tax cuts in the autumn.
How much has yet to be decided but discounts of between £300 and £600 could be paid out to 3million of the poorest households in England and Wales.
Other proposals include bringing forward to this autumn the planned 1p off the basic rate of income tax, a measure due to take effect in 2024, and/or VAT cuts.
These are sensible moves. But timing is of the essence. It is not only the poorest who are being punished by raging inflation but the squeezed middle classes.
If you add together the higher costs of heating and electricity bills, council tax, rail fares and foodstuffs, then most of us are looking at a loss in the standard of living not felt since the 1970s.
Which is why the Chancellor should not wait until an autumn Budget before introducing the tax cuts: that would be fiddling while Rome burns.
Waiting until then will prolong the pain. Hanging around could make the outlook for the economy worse as consumers and businesses will delay their spending and growth plans because of fears for the future.
The Chancellor only needs to look to the Bank of England to see how the waiting-game may have cost us dear.
As is becoming apparent, the decision by Andrew Bailey, the Governor, to allow monetary supply to run riot and not increase interest rates earlier may well have stoked inflation rather than helped contain it.
With the pound so weak, a sign of strength from the Chancellor would also come as a well-needed boost for investors.
Liz Truss, the Foreign Secretary, was right when she said yesterday that the best response to the global crisis was to grow the economy and to attract new business investment.
The problem though – as Truss knows – is that attracting investors requires creating a dynamic environment, in which investors feel confident. Right now, they don’t.
As the increasingly impressive Rachel Reeves, Labour’s shadow chancellor, pointed out, public and private investment in the UK will be 18 per cent of GDP this year.
This compares with an average of 23 per cent in other G7 countries, and is likely to last over the next five years, leading to a £1trillion ‘investment gap’.
Setting the right tone is Sunak’s job. He did it so well at the start of the pandemic with his furlough scheme and he can do it again now.
He must stop harping on about how no ‘honest chancellor’ can promise to reduce the impact of global inflation which has been caused by the pandemic and now by Russia’s war on Ukraine.
People are not dumb. They know that but they also know more can be done to ease the pain.
It’s time Sunak proved he really is a low-tax conservative, not just a philosophical one. Even if it means a punch-up with his boss next door at No 10.
Burberry’s new chief executive, Jonathan Akeroyd, will be pleased with his first crop of results.
Profits were the highest for eight years as shoppers splashed out post-pandemic on luxuries.
But its dependence on China’s super-rich might prove a hiccup: even the fashion-savvy Chinese have not been buying smart trench coats while locked up at home.
Sales in the country are down by 13 per cent in the last quarter with nearly half of its 65 stores still closed and e-commerce disrupted.
Burberry’s claims that once the lockdowns are over, the Chinese will be out shopping in force again and is sticking to its growth targets. Looking at China’s recent growth figures, that’s optimistic.
May be time to take some profits?
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