Don’t hike fuel prices, Chancellor is warned

RURAL pressure groups and motoring organisations are urging Chancellor Jeremy Hunt not to hike fuel duty in his autumn budget today.

The RAC told him that increased pump prices could push inflation even higher.

Meanwhile, the Countryside Alliance warned an already grave situation for rural motorists would be made much worse by a fuel price hike.

The Alliance said rural households are already spending around £800 a year more on petrol and diesel than those in towns and cities.

Analysis by motoring services company the RAC found there is an “extremely strong link” between higher fuel costs and inflation.

The Treasury cut fuel duty by 5p per litre in March. Average pump prices have fallen from the record highs of 192p per litre for petrol and 199p per litre for diesel in July.

However, the RAC said the average cost of a litre of petrol rose by 4p in October, while diesel was up 10p.

RAC fuel spokesman Simon Williams said: “When the prices drivers pay to fill up rise, inflation seems certain to follow.

“That’s something the Chancellor must recognise as he considers what action to take today.”

The South West Chamber of Commerce is urging the Chancellor to produce a long-term plan for small and medium-sized businesses to help them survive the economic downturn.

UK inflation soared to a 41-year high of 11.1% last month as rocketing energy and food prices intensified the cost-of-living crisis, heaping pressure on the Chancellor ahead of his Autumn Budget today.

October’s rate of Consumer Prices Index (CPI) inflation was worse than expected, hitting the highest rate since October 1981 and up from 10.1% in September.

Most economists had been expecting a rise to 10.7%. The big leap follows a near 130% surge in gas prices over the past year, with electricity rising by around 66%, while food inflation hit a record high of 16.5%, according to the figures from the Office for National Statistics (ONS).

The jump in inflation comes despite the Government’s energy support, which has sought to limit annual household gas and electricity bills at around £2,500 a year.

Prime Minister Rishi Sunak said inflation was the “enemy we need to face down”, but insisted the decisions in today’s autumn statement would be “based on fairness, they will be based on compassion”. However, fears are mounting over the impact on already struggling households and businesses, with Chancellor Jeremy Hunt expected to unleash tax hikes and spending cuts to address a black hole in the nation’s finances.

Economists are hopeful that October’s inflation was the peak, predicting that CPI will gradually ease back after October, though it is unknown at this stage what energy support will be available after next April.