Inflation news – live: Update due as outlook for government finances ‘still grim’

The new figures are expected on Wednesday morning.

A panel of experts also told Parliament’s Treasury Committee that households are facing a “two-year living standard squeeze” as a result of higher energy bills and tax rises.

It comes after Chancellor Jeremy Hunt promised a major expansion in state-funded childcare and tax breaks for businesses in last week’s Budget.

The Government’s official forecaster, the Office for Budget Responsibility (OBR), also confirmed last week that the UK economy is now on track to avoid a technical recession, which means two consecutive quarters of decline.

Henry Saker-Clark has the full story:

Good evening, and welcome to The Independent’s live blog on inflation.

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House sales fell by nearly a fifth (18%) in February 2023 compared with the same month a year earlier, in signs that the housing market is slowing, according to HM Revenue and Customs (HMRC).

Across the UK, an estimated 90,340 homes were sold in February this year, which was 4% lower than in January 2023.

HMRC’s report said: “Towards the end of last year mortgage and interest rates increased and we are starting to see the impacts of those changes within these statistics.

“Seasonally adjusted residential property transactions appear depressed, indicating a slowing of the housing market.”

The figures were released as financial information website Moneyfacts said average two and five-year fixed-rate mortgages have edged down to their lowest levels in six months.

Vicky Shaw reports:

This March, many in the UK will still be looking anxiously at their energy bills and thinking twice about switching the heating on.

Ofgem‘s energy price cap – the maximum amount average users can be charged – will drop by a massive 23 per cent £4,279 in January to £3,280 in April in response to falling wholesale gas prices. But campaigners warn that imminent changes to the government support measures, introduced last year to tackle soaring domestic energy costs, mean many could actually end up paying more.

Chancellor Jeremy Hunt has announced that the energy price guarantee – introduced by Liz Truss last September to ensure households paid no more than £2,500 for their electricity and gas, with the government subsidising the remainder permitted by the cap – would be increased to £3,000 from next month.

That is a considerably less generous offering and coincides with a £400 discount introduced by Rishi Sunak a year ago being allowed to elapse. That could leave households £900 out of pocket in total, with a forecast cold snap due this month likely to necessitate having the radiators cranked up for longer.

The UK rate of inflation meanwhile currently stands at 10.1 per cent, keeping the cost of goods on supermarket shelves high, while the Bank of England’s Monetary Policy Committee has raised interest rates to 4 per cent.

Joe Sommerlad details all of the benefits, pensions and cost of living payments going out in March:

Concern about immigration has risen sharply in the past month but the cost of living remains the public’s overwhelming priority, according to a monthly poll.

One in five people told pollster Ipsos that they thought immigration was one of the biggest issues facing the country in a survey carried out in the first week of March, as the Government was preparing to introduce its Illegal Migration Bill.

That total represents a 75% increase since February, with concern highest among older voters, southerners and the least deprived.

But despite the increase in concern about immigration, inflation remains the public’s number one priority with 39% of people telling Ipsos it was one of their biggest issues.

Read the full story here:

Martin Lewis has warned supermarket bills will never return to what they were – even with inflation gradually decreasing.

The finance expert explained that a lower rate of inflation does not mean that prices are dropping, but rather that they will not rise as fast.

Prices going down would actually be an issue for the economy as it would result in deflation, which can signal an economic downturn and perhaps a recession or depression.

The money saving expert told The Sun: “I don’t think prices are ever going to go back to where they were. If they did, that would cause a problem for the economy as we would get something called deflation.

“The most important thing is that we get inflation down and then, over time, people’s incomes will hopefully catch up. But there are still going to be a tough ­couple of years ahead for many people.

The cost of living rocketed across the UK during 2021 and 2022. After hitting a 41-year high of 11.1 per cent last October, inflation eased to 10.1 per cent in January but this is still a 10 per cent increase on the previous January’s figure.

My colleague Tara Cobham has the full story:

As spring finally arrives in the UK after a long and difficult winter, the strain on household finances from exorbitant energy bills should begin to ease in the weeks to come.

The cost of living crisis remains acute but there was some good news for consumers in Jeremy Hunt’s Budget on 15 March, with the chancellor announcing that the energy price guarantee (EPG) – introduced by Liz Truss last September to ensure households paid no more than £2,500 for their electricity and gas, with the government subsidising the remainder permitted by Ofgem’s energy price cap – would be extended for a further three months.

Mr Hunt had been tempted to increase the EPG to £3,000 from 1 April, a considerably less generous offer that would have eased the burden on the state, but ultimately thought better of it.

“High energy bills are one of the biggest worries for families, which is why we’re maintaining the energy price guarantee at its current level,” the chancellor told parliament.

“With energy bills set to fall from July onwards, this temporary change will bridge the gap and ease the pressure on families, while also helping to lower inflation too.”

Joe Sommerlad reports: