Families squeezed as inflation outstrips pay rises

The pressure on family budgets intensified at the start of the year, as inflation stayed at 2.7 per cent for a record fourth consecutive month, while pay rises averaged 1.3 per cent

Food prices rose by 4.5 per cent in the year to January with vegetables going up 8.4 per cent and fruit 7.2 per cent, after rain-ravaged harvests.

TUC general secretary Frances O’Grady said: “The cost of living is rising twice as fast as wages, and household budgets are still under huge strain.” Economists warned there was no sign of any easing with inflation likely to stay above the Government’s two per cent target for the rest of the year.