What assessment has the Minister made of the impact that inflation falling to 3.4 per cent will have on tackling poverty and promoting prosperity?
Whilst inflation is falling, meaning the rate at which prices are increasing is now decreasing, the level of prices remain higher than they were. According to the Consumer Price Index, the level of prices is now 21% higher than three years ago.
The Office for Budget Responsibility forecasts Real Household Disposable Income (RHDI) per person, the single most important economic measure of living standards, is forecast to be 3.5 per cent lower in 2024-25 than the pre-pandemic level, representing the largest reduction in real living standards since ONS records began in the 1950s. RHDI per person is not forecast to recover its pre-pandemic level until 2027-28.
Following the March budget the Resolution Foundation has said, after adjusting for inflation, household disposable incomes are poised to fall by 0.9% between 2019 and the end of 2024.