The Next Few Months Will Be Tough, Says Chancellor As He Vows To Cut Tax For Business

Rishi Sunak has vowed to cut taxes for business in his autumn budget, as the Treasury continues to weigh up how to tackle the cost of living after it was revealed yesterday that prices are rising at the fastest rate for 40 years.

- Jessica Elgot and Phillip Inman

With MPs from across the Tory party urging him to take emergency action to help struggling families after inflation hit a 40-year high of 9%, Sunak - speaking at the annual Confederation of British Industry (CBI) dinner - warned that "the next few months will be tough".

The rising cost of gas and electricity has pushed household energy bills to record levels, while the escalating cost of food and transport also contributed to the rising cost of living, deepening the crisis affecting millions of low- and middle-income families. Business groups said all sectors of industry and commerce were suffering from the steep rise in energy and fuel costs, with many facing a similar shock to their finances as seen during the Covid pandemic but without the same level of government support.

The Office for National Statistics said the 54% increase in the energy price cap in April, which took the average annual gas and electricity bill close to £2,000, was the main reason for the jump in the consumer prices index from 7% in March.

Average petrol prices rose to a record 161.8p a litre in April, from 125.5p a year earlier. Diesel was another factor behind the increase in the consumer prices index from 7% in February, after the average cost at the pumps hit a record high of 176.1p a litre, leading to an average increase over the past 12 months in motor fuels of 31.4%.