As the UK grapples with stubbornly high inflation, Chancellor Rachel Reeves faces mounting criticism over her handling of the economy. Recent figures from the Office for National Statistics (ONS) showed that the Consumer Price Index rose from 3.2% to 3.4% in December 2025, driven by increases in tobacco duties and airfares.
The core measure of inflation, which excludes food and energy bills, remained at 3.2% and failed to come down as Reeves had promised in her budget. ONS chief economist Grant Fitzner pointed to staple food items like bread and cereals as contributing to the upward pressure on prices.
Reacting to the news, the Conservative Party’s Shadow Chancellor, Sir Mel Stride, lambasted Reeves, stating, “Inflation is rising because of Labour’s economic mismanagement – pushing up the cost of living and punishing the most vulnerable.” Stride argued that the government’s “record-high tax burden and irresponsible borrowing are stifling growth and fuelling inflation – leaving working people worse off.”
The latest inflation figures mark the fifth consecutive month of price increases, despite Reeves’ claims in her budget that the measures taken would bring costs down. KPMG’s chief economist, Yael Selfin, warned that the news “closes the door on a February interest rate cut,” meaning that mortgage rates will remain higher for longer.
Addressing the World Economic Forum in Davos, Reeves pledged that 2026 will be “the year that Britain turns a corner.” She insisted that her “number one focus is to cut the cost of living,” pointing to measures announced in the budget such as £150 off energy bills, a freeze on rail fares and prescription charges, and increases to the national minimum and living wage.
However, the persistent inflation and growing criticism from the opposition suggest that Reeves faces an uphill battle to deliver on her promises and regain the public’s trust in her handling of the economy.
