THE cost-of-living crisis is still hammering households in every corner of the country, the TUC warned today, as inflation figures remained unchanged and Britain is believed to have slipped into recession.

The union body called for ministers to extend cost-of-living payments which are set to end by March after figures by the Office for National Statistics (ONS) revealed that Consumer Price Index (CPI) inflation remained at 4 per cent in January.

Food prices fell for the first time by 0.4 per cent since September 2021, with the cost of bread and cereals, cream crackers and chocolate biscuits falling, the ONS said.

The costs are still 7 per cent higher than a year ago.

Prime Minister Rishi Sunak insisted that the economy has “turned the corner” following the data.

But the ONS is due to publish gross domestic product (GDP) figures for December on Thursday and is predicted by experts to reveal that Britain’s economy contracted for the second quarter in a row in the final three months of 2023.

This means that Britain would have tipped into a technical recession, as defined by two or more quarters in a row of falling GDP.

ONS estimates suggest the economy did not grow at all between April and June before shrinking between July and September, which has left Britain at risk of recession in the final three months.

TUC general secretary Paul Nowak hit out at the Tories for delivering “a decade of dismal economic growth which has hit pay packets and household budgets hard.

“The cost-of-living crisis is still hammering households in every corner of the country,” he said.

“Prices are still going up with inflation at double the Bank of England’s target.

“And whether it’s covering the weekly shop or paying the bills, working people remain under the cosh.

“After 14 long years of stagnating living standards under the Conservatives, it’s little wonder so many are feeling the pinch.”

Mr Nowak said that if real wages had grown at their pre-crisis trend the average worker would be earning around £14,500 a year more.

“And with final cost of living payments set to end by March, ministers must act now to extend the scheme and support struggling households,” he said.

“It’s time for a government with a serious long-term plan.”

Unite general secretary Sharon Graham said: “Despite all the talk of the cost-of-living crisis being over, the truth is that prices are not falling and average wages have not caught up.

“Energy costs are still 80 per cent higher than in 2021.

“Workers must not be made to pay the price for the government’s failure to tackle the rampant profiteering that has been a key driver of this crisis.”

Joseph Rowntree Foundation chief analyst Peter Matejic said that families will still be debating “whether to turn the heating on, or to replace their shoes that have holes in or to skip another meal because they can’t afford it.”

He said: “Politicians can start making a difference at the Budget. Universal credit needs to reflect the actual cost of essentials.

“Beyond that, we need an economy that works for people, not one that leaves people exposed to unjustifiable hardship.”

Shadow chancellor Rachel Reeves said that working people are worse off after “fourteen years of economic failure” by the Conservatives, adding that it was “time for change.”

Chancellor Jeremy Hunt insisted that the government’s plan “is working,” and that “inflation never falls in a perfect straight line.

“We have made huge progress in bringing inflation down from 11 per cent, and the Bank of England forecast that it will fall to around 2 per cent in a matter of months,” he said.

The Bank’s 2 per cent figure is a target, not a forecast.