Food costs increasing more rapidly as Starmer promises to ‘improve people’s lives’

Starmer Pledges to Address Cost of Living Pressures

Sir Keir Starmer has committed to tackling the ongoing cost of living challenges this year, promising relief for families across the country.

Rising Food Prices Add to Economic Strain

Recent data reveals that food prices are climbing at a faster pace, intensifying the difficulties facing the government. According to figures from the British Retail Consortium (BRC) and NielsenIQ, food inflation reached 3.3% in the year to December, up from 3% in November.

This surge in food costs pushed overall shop price inflation to 0.7% year-on-year in December, a slight increase from the previous month's 0.6%.

While the BRC did not specify which products saw the largest price hikes, separate statistics from the Office for National Statistics indicate that everyday essentials like butter, beef, and chocolate have been major contributors to grocery inflation over the past year.

Government Response and Policy Concerns

Sir Keir Starmer has made it clear that easing the cost of living will be a central priority for his administration in the coming year. During a recent visit to Berkshire, the Prime Minister assured the public that they would soon notice a positive impact on their finances.

However, the BRC cautioned that some of Labour’s initiatives—such as the introduction of a packaging tax and increased regulatory requirements—are adding to the upward pressure on prices. Additional regulations were also cited as contributing factors.

Helen Dickinson, Chief Executive of the BRC, commented, “Although lower energy prices and better crop yields may help reduce some costs, new government policies and regulations are likely to keep inflation elevated.”

She added, “In 2026, it is essential for the government to collaborate with businesses to create policies that ease the burdens facing the retail sector.”

Household Finances and the Housing Market

Separate data from the Bank of England showed that household borrowing reached £2.1 billion in November, the highest level in two years and up from £1.7 billion in October.

At the same time, the number of new mortgage approvals dropped to their lowest point in five months, reflecting ongoing weakness in the UK housing market. Mortgage approvals for home purchases fell to 64,530 in November, down from 65,010 the previous month.

Karim Haji of KPMG observed, “As we move into 2026, the prevailing mood is one of vulnerability, with persistent economic uncertainty and consumers remaining cautious about spending.”

Business Leaders Express Concerns

A recent Deloitte survey of finance leaders found that economic and financial instability in the UK is the main obstacle to the nation’s competitiveness. Respondents also identified tax rates and regulatory burdens as significant challenges.

Inflation Remains Above Target

Labour’s efforts to ease the cost of living come as the latest Office for National Statistics (ONS) figures show inflation at 3.2% in November, still above the Bank of England’s 2% target.