London charity says 30-year high inflation uncovers ‘structural problems’ in the UK economy

Joe Cole, from Advice for Renters, says that inflation can’t be solely blamed on rising fuel costs.
Watch more of our videos on Shots! 
and live on Freeview channel 276
Visit Shots! now

A London charity has warned that record inflation rates in the UK are a sign of “real, structural problems” in our society that need to be addressed.

The Office for National Statistics says that inflation is at its highest rate for 30 years, having risen to 5.4% in the 12 months to December.

Hide Ad
Hide Ad

It is the first ONS assessment of the cost of living since chancellor Rishi Sunak’s Autumn Budget, where he predicted inflation will average more than 4% in 2022.

The increase has been attributed to rise in food, non-alcoholic drinks, fashion, fuel and energy costs, which is putting pressure on household finances.

Supply problems and higher shipping costs also continue to hurt businesses.

Joe Cole, from Advice for Renters, says that inflation can’t be solely blamed on rising fuel costs. Credit: SuppliedJoe Cole, from Advice for Renters, says that inflation can’t be solely blamed on rising fuel costs. Credit: Supplied
Joe Cole, from Advice for Renters, says that inflation can’t be solely blamed on rising fuel costs. Credit: Supplied

Joe Cole, from London charity Advice for Renters, says that inflation can’t be solely blamed on rising fuel costs.

Hide Ad
Hide Ad

Staff shortages are also a particular problem in the UK, due to Brexit and the pandemic.

“Fundamentally the UK economy just doesn’t have enough people to do the jobs that are needed and the EU kept us on life support with the influx of seasonal and skilled workers,” Mr Cole told LondonWorld.

“These people are now gone.

“We have had fruit rotting in farms, we have lorry driver crises, and now a crisis in care, who knows what next week’s crises of labour will be.”

He also says that another reason for our labour shortages is a lack of young workers and that unaffordable housing is a causing factor in the UK’s declining birth rate.

Hide Ad
Hide Ad

“Births are more likely if the parents have secure and fair housing – where families can be raised,” he said.

“We have an average tenancy of three months in the UK and house ownership is unfeasible to many.

“In the 1950s the average age of a first time buyer was 23, now it is 33.

“We are currently, nationally, at a record low fertility rate meaning there is a ticking time bomb for services, pensions and taxes as there will not be enough workers joining the work force to replace those leaving and we will have a inverted demographic much like Japan.

“This will happen in a short space of time.

Hide Ad
Hide Ad

“If you cannot afford a home over your head, let alone afford child care, you are very unlikely to be looking at starting a family – add in the cost of London and it is truly unachievable to many.

“There are real, structural problems that need to be addressed in our society in order to have our cake and eat it.”

Jack Leslie, a senior economist at the Resolution Foundation, said: “Rising inflation means that Britain’s cost of living squeeze will continue to get tighter over the coming months, particularly when energy bills jump in April.

“The drivers of inflation are becoming more broad-based, though still goods-focused, and will therefore affect everyone across society.

Hide Ad
Hide Ad

“Output price inflation – a leading indicator of wider inflation – eased in December.

“This may be a blip, but it could indicate an easing of price pressures.

“Periods of sustained inflation over five per cent will be a new experience for new millennials and Generation Z, and a throwback to older generations who remember the 1980s.

“However, the impact of high inflation in terms of shrinking pay packets is becoming wearily familiar to younger workers, who have already experienced three sustained periods of falling real wages in their short careers.”

The Bank of England expects UK inflation to be in excess of 5%, above its 2% target, before the rate gradually levels out over 2022 and 2023.