The Joseph Rowntree Foundation's Alfie Stirling argues that new chancellor John Healey faces an even harder task than his predecessor Rachel Reeves in tackling Britain's cost of living crisis, with Prime Minister Andy Burnham promising urgent action to give families "some breathing space". Healey inherits a bleak outlook for household incomes, far less preparation time, and a more complicated economic backdrop, making the political and economic stakes of getting policy right unusually high.

Household incomes normally rise by around £5,000 every five years, yet families were on course to be worse off in 2029 than in 2019 before Reeves took office, an unprecedented decade-long decline. Healey must also contend with elevated inflation and borrowing costs, worsened by supply-chain pressures from the conflict in Iran, meaning the Bank of England may raise rather than cut interest rates. Stirling urges the government to tackle inflation directly by reducing essential costs such as energy, citing the Joseph Rowntree Foundation's proposed "affordable energy guarantee" funded by closing tax gaps between investment income and earnings, alongside similar action on housing costs.