Asked by: Lord Walker of Broxton (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the impact on household budgets of the reduction of the rate of inflation from 3.4 per cent in December to the current rate of 3 per cent.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
Inflation fell to 3 per cent in January 2026. Wages rose faster than inflation in Q4 2025, indicating that real wages are growing, which will support household purchasing power and ease pressure on household budgets.
The Government welcomes the fall in inflation and is committed to improving living standards for everyone, in every part of the UK. We recognise that the cost of living remains too high, which is why, at the last Budget, we took action to bear down on prices and help ease the cost of living pressures for people by targeting everyday expenses. This includes taking on average £150 of costs off household energy bills from April 2026, expanding the £150 Warm Home Discount to 6 million lower income households, freezing rail fares and NHS prescription fees, and extending the 5p fuel duty cut until the end of August 2026.
Asked by: Lord Walker of Broxton (Labour - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the impact on household budgets of the Bank of England's decision in January to reduce the base rate to 3.75 per cent.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
In December 2025, the Monetary Policy Committee (MPC) at the Bank of England announced its decision to reduce the Bank Rate to 3.75%. The MPC has the government's full support as it acts to return inflation to the 2% target sustainably. This was the sixth interest rate cut since the election. Those interest rate cuts will save households over £1,300 a year on a typical new 2-year fix for a £215,000 mortgage over a 29-year term.