Rishi scrambles to quell rising cost-of-living panic with bills set to soar TOMORROW

Rishi Sunak today scrambled to quell mounting cost-of-living panic with eye-watering rises in bill set to hit tomorrow.

The Chancellor warned he cannot simply spend more to stave off the pain from spiking inflation, after Covid left the government with a £2.3trillion debt mountain.

He said even if it was ‘unpopular’ he needed to be ‘honest’ with people that borrowing more and leaving the UK finances vulnerable to inflation-linked interest rates could actually ‘make the problem worse’.

The intervention, in an interview with BBC Newscast, comes as families brace for the worst squeeze on living standards since records began in the 1950s this year.

Hikes in energy bills are set to take effect tomorrow, with many other costs such as broadband also due to get more expensive, and taxes rising in the coming days to help balance the books and fund social care provision. 

Labour has gone on the attack by claiming households face being £2,620 poorer in real terms over the next 12 months, pointing to fuel prices and mortgage interest rates as other pinch-points.

Meanwhile, unions have reacted with fury and threatened strike action after the government said civil servants should only get pay rises of between 2 per cent and 3 per cent.  

Mr Sunak has been heavily criticised for not providing enough help for hard-pressed Britons in his mini-Budget last week, and has not ruled out another support package before October.  

But amid alarm that high wage settlements could embed spiralling costs in the economy, Mr Sunak said ‘the biggest risk we face now is high inflation’. 

The headline CPI rate is forecast to average 7.4 per cent this year, and RPI – the measure used for interest payments on a lot of government debt – is likely to be significantly higher. 

Mr Sunak said: ‘I’m confident in what we’ve done. I know it’s tough for people. 

‘We’re facing a very difficult situation with the price of things going up and I want to do what we can to ameliorate some of that, but I’m also honest with people that we can’t ameliorate all of it, sadly. 

‘That’s difficult for people to hear and the toughest part of this job is not being able to do everything that people would like you to do because we’re already borrowing quite a large amount of money, and I don’t think borrowing lots more would be sensible. 

‘Actually, it has the risk of making the problem worse when you’ve got inflation and interest rates going up.’ 

He added: ‘Some of these things are difficult. They’re certainly unpopular. But they’re responsible and will help us in the long-term and I’m not going to deviate from that just for some short-term popularity gain.’

The websites of several major energy companies have crashed today as thousands of customers attempt to upload their meter readings ahead of tomorrow’s price hike – while one firm has sensationally attempted to blame money expert Martin Lewis for sparking ‘unprecedented demand’.

Ofgem is raising the price cap by £693, and there are fears it will go higher again in October amid the standoff with Russia over Ukraine.

National insurance increases worth around £6billion are taking effect in a few days.

Meanwhile Britons also face the prospect of council tax increases. Average council tax bills in five of England’s nine regions are to exceed £2,000 in April.

Ahead of the energy cap rise, Britons have been urged by experts to submit a meter reading to avoid possible overcharging.

But customers of major suppliers such as British Gas, EDF and E.ON have struggled to access their online accounts this morning due to ‘technical issues’ and ‘essential maintenance’ across the three websites.

 stepped up his attack on the cost-of-living crisis today as he launched Labour’s election campaign warning that households face a £2,620 squeeze this year.

At an event in Bury alongside deputy Angela Rayner, Sir Keir highlighted the huge hit in the pipeline as he condemns the government for failing to provide enough help.

The party’s figures show the average tax bill is set to rise £1,060 over the next 12 months, with the controversial national insurance rise taking effect in the coming days.

Meanwhile, energy prices add £690, fuel £300 and higher food costs £275 – with the Bank of England raising interest rates leaving the average family another £295 worse off.  

Despite much of the added expense being down to spiking inflation caused by global factors, Sir Keir will say that Labour would have acted to impose a windfall tax on oil and gas firms in order to cut bills by up to £600.

Thousands of council seats and mayoralties across the UK are up for grabs on May 5, with Tories nervous about fallout from soaring prices and Partygate. 

Sir Keir told the crowd in Bury that the financial squeeze was ‘the cost of the Tories’, saying that in contrast Labour was ‘on your side’.  

The launch comes after Boris Johnson yesterday defended the level of help doled out by Rishi Sunak in the mini-Budget last week.

And the Government today admitted there is ‘no doubt’ that rising energy prices ‘will be a significant challenge for a majority of the British public’said.

The PM’s official spokesman highlighted the support offered by the Government and said: ‘We would encourage anyone that is concerned to make sure that they are availing themselves of the support that is available to them.

‘But of course, we recognise – and as the Chancellor has said – that there is the Government cannot do to absolutely everything to cover off some of these pressures that we are seeing globally.’

The spokesman said there were ‘potentially further pressures that may come in towards the end of the year’ but said: ‘The Prime Minister recognises this is a very difficult time for the British people, indeed for people around the world, as they face cost of living pressures, the Government is here for them, to support those most in need, with £22billion of support, targeted at those who need it most.’