Reeves could make the cost of living crisis even worse ...Middle East

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The future of the Labour Government depends on the cost of living – and right now, things are not looking good.

Sir Keir Starmer’s victory at the last general election came after a wild spike in inflation which meant living standards ended up lower than they had been five years earlier.

There were other factors in the collapse of the Conservatives – but there is no doubt that one huge reason the public turned away from the party was a widespread feeling that Tory rule had left people worse off.

These days, the cost of living does not hog the headlines in the same way as other hot-button issues such as immigration and foreign affairs.

But polls suggest it is still voters’ main priority. A BMG Research survey for The i Paper in August found that three quarters of people name it as one of their top political issues, with 28 per cent putting it at number one – more than any other topic.

That is why it is potentially so damaging for Starmer and Rachel Reeves to see the International Monetary Fund (IMF) predict that UK inflation will remain higher than any other large rich country, this year and next.

Wages are still running ahead of price rises, making the average person better off – but salary growth is expected to fall, and inflation is at its worst on some of the most essential goods and services, such as energy, water and food.

The Chancellor says she has heard the message. But raising taxes by billions of pounds at the Budget will obviously make the cost of living worse rather than better, at least in the short term.

Some Labour MPs say that while they welcome the Government’s focus on boosting economic growth, ministers need to do more to ensure that the proceeds of growth are feeding through to workers in the form of higher incomes and greater spending power.

Labour’s biggest problem is a feeling among voters that the party just is not listening to them, and does not care about them. That manifests in lots of different ways – arguments about flag-waving, complaints about asylum accommodation – but the cost of living remains the key to everything else.

If Starmer and Reeves can take action – and be seen to take action – they have a path back to popularity. If not, they are doomed.

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