Rishi Sunak warned that he could not “protect people completely” from the cost-of-living squeeze as he came under intense pressure to act as inflation hit a 40-year high.
The Chancellor faced calls from business groups, charities and opposition politicians to cut taxes or increase state support for firms and households struggling to cope with rising prices.
Consumer Prices Index inflation soared to 9% in the year to April, up from 7% in March, the Office for National Statistics said.
It was the fastest measured rate since records began in 1989, and the ONS estimates it was the highest since 1982.
The Bank of England has a mandate to keep inflation below 2%, but Governor Andrew Bailey has admitted to being helpless in the face of global pressures including a spike in energy costs and the war in Ukraine.
Mr Sunak said: “Countries around the world are dealing with rising inflation.
“Today’s inflation numbers are driven by the energy price cap rise in April, which in turn is driven by higher global energy prices.
“We cannot protect people completely from these global challenges but are providing significant support where we can, and stand ready to take further action.”
The Chancellor has already pledged around £22 billion in support, including £9 billion to deal with household energy bills and measures to mitigate the impact of April’s rise in National Insurance Contributions (NICs).
But he faces calls for more action immediately, rather than waiting for the autumn budget, with inflation set to increase further this year.
Reports have suggested that measures including increasing the warm home discount by up to £600 to cope with rising energy bills are under consideration.
The Times suggested that the package to help with energy bills could be unveiled in July followed by tax cuts in the autumn.
The I newspaper reported that Mr Sunak was plotting a 1p cut in income tax from April 2023, a year earlier than planned.
The Confederation of British Industry said it was “critical” for the Government to examine ways to help people facing real hardship and support vulnerable firms.
The British Chambers of Commerce called for Mr Sunak to reverse the rise in NICs and give businesses a VAT discount on their energy bills.
Opposition parties and some Tory MPs want to impose a windfall tax on oil and gas companies which have enjoyed bumper profits as a result of high global prices. The money raised would be used to alleviate the pressure on households.
Ministers continue to resist the idea and Foreign Secretary Liz Truss told Sky News: “The problem with a windfall tax is it makes it difficult to attract future investment into our country. So there is a cost in imposing a tax like that.
“And my view is lower taxes are the best way to attract more investment, to get the businesses into this country that can create these high paid jobs, which is what we need to face down these global headwinds.”
Shadow chancellor Rachel Reeves demanded a full emergency budget with Labour set to force a vote on the issue later on Wednesday.
She said: “Today’s inflation data will add to the worries families already face as prices soar and pay packets are crunched.”
Liberal Democrat Leader Sir Ed Davey said: “Families and pensioners on the brink need saving from soaring inflation but this Conservative government is nowhere to be found.
“We need an emergency VAT cut now to slash prices at the till and fuel pump today.
“The warning lights are all flashing red and Boris Johnson hasn’t a second to lose.”
Imran Hussain, director of policy and campaigns at charity Action for Children, said: “These grim figures make clear that more and more families are starting to run out of road as they face inflation at its highest level in a generation, spiralling energy bills set to rise further and an entirely inadequate benefits system.
“They need help with meeting basic living costs now, not warm words hinting at action in the future.”
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