Leader: Lowering energy costs key to driving down inflation

Further evidence of the devastating toll of the cost-of-living crisis has emerged, with research revealing one in four Scots has accessed the NHS because of its impact on their mental or physical health.

As ever, groups long known to be at greater risk from poverty are suffering the most, with nearly two-thirds of single parents reporting a somewhat or very negative impact on their physical health.

Meanwhile, new figures have shown that high inflation and soaring energy costs have led to more than 12 hospitality venues going out of business each day in Britain over the past year.

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When Prime Minister Rishi Sunak pledged in January that he would halve inflation by the end of 2023 he was accused by critics of promising something that was very likely to happen in any case.

Households are being hammered, with food inflation at 19.1 per cent - the highest it has been for 45 years (Photo by DENIS CHARLET / AFP) (Photo by DENIS CHARLET/AFP via Getty Images)Households are being hammered, with food inflation at 19.1 per cent - the highest it has been for 45 years (Photo by DENIS CHARLET / AFP) (Photo by DENIS CHARLET/AFP via Getty Images)
Households are being hammered, with food inflation at 19.1 per cent - the highest it has been for 45 years (Photo by DENIS CHARLET / AFP) (Photo by DENIS CHARLET/AFP via Getty Images)

But many economists have been surprised at how stubbornly the rate of inflation has remained cripplingly high in the UK.

Consumer Prices Index inflation hit 10.1 per cent in March, down from 10.4 per cent in February but higher than the 9.8 per cent that had been predicted, fuelling fears the Bank of England might raise interest rates as high as 5 per cent to curb rising prices.

Household budgets are being hammered, as latest figures show food prices rising by 19.1 per cent year-on-year – the sharpest jump since 1977.

Huw Pill, the chief economist at the Bank of England, last week said it was time that households and businesses simply accept they are poorer and stop seeking pay rises and passing on rising costs.

Mr Pill said: “What we’re facing now is that reluctance to accept that, yes, we’re all worse off, and we all have to take our share.”

With other countries across the West experiencing similar inflationary problems, the soaring cost of energy is increasingly being blamed for the unrelenting pressure on household budgets.

The price of energy feeds into the costs of transport, fertiliser and food production, heating and cooling, and down into every other good and service in the economy.

If Mr Sunak is to meet his pledge of halving inflation by the end of this year, the best place to start would be to address the sustained high cost of energy.