Rishi Sunak said to avoid ‘damaging’ tax hikes Business

The Resolution Foundation said the outlook for households was “gloomy”, with food inflation rising and energy prices likely to rise significantly in October.

The Living Standards think tank has called on the Chancellor to review planned adjustments to benefit payments, which will likely mean a 5% cut in real terms to Universal Credit and the state pension due to the surge of inflation.

He said benefits should be increased by 8%, rather than the planned 3.1%.

James Smith, research director at Resolution, said: “The chances of a recovery in living standards this year are diminishing as rapidly as inflation rises, and the risk of another recession looms.”

Manufacturers are already raising prices at a record pace in the face of soaring inflationary pressures.

The latest manufacturing outlook from the MakeUK and BDO group of companies revealed the highest price balance in the history of the survey, while more than 54% of companies reported a ‘major increase’ in costs.

Make UK called for the reintroduction of business rate relief and for Mr Sunak to postpone a planned increase in National Insurance. He spoke out in favor of an extension of the super deduction, “with a view to making it permanent in the Autumn Budget”.

Stephen Phipson, its chief executive, said many businesses “simply won’t recover” without additional support.

A Treasury spokesperson said: ‘We have supported businesses throughout the pandemic with an unprecedented package of support including VAT cuts, business rate holidays and government guaranteed loans from worth around £400bn, and we will continue to be a strong supporter of them in the months to come.”