Rising inflation affects all our living standards. Together with planned tax increases it means that average take-home pay is likely to fall over the coming year. It also raises specific issues for benefits policy. Those on low incomes will tend to find it hardest to tide themselves over during a period in which their real incomes are eroded, which by default is what happens when inflation increases sharply because the major benefits go up in line with a lagged measure of inflation. In April, benefits are set to rise by the rate of general (CPI) inflation in the year to September 2021, which was 3.1%. But according to the latest Bank of England forecasts, inflation in the year to April 2022 is in fact expected to be around 6%.
