Struggling families face a deepening cost of living crisis as the average council tax bill tops £2,000 for the first time.
The latest hike represents another blow to hard-pressed homeowners after Government statistics revealed that the average council tax bill for a Band D property will reach a record £2,065 in 2023-24.
Meanwhile, more than 1million homeowners on variable rate mortgages will see their payments go up by hundreds of pounds a year after the Bank of England hiked interest rates to 4.25 per cent.
The move was backed by Chancellor Jeremy Hunt, who said that rising prices were ‘strangling growth’.
And the Bank governor raised the prospect of more pain to come from further rate rises.
Want to know how much your council tax could increase by? Type the name of your local authority into the box below to reveal the planned rise:
New figures from the Department for Levelling Up, Housing and Communities show that the average charge for a Band D property will be £2,065 for 2023-24
The total is up £99 on the figure for the current financial year, a 5.1 per cent rise, yet residents can expect worsening services as chiefs say they must make massive cuts to balance the books.
At the same time, millions of households are receiving unwelcome letters from energy firms warning that their fuel bills will soon rise by £67 a month as the Government’s rebate scheme comes to an end.
The economic shocks come just a day after inflation rose again to 10.4 per cent in the year to February – driven by surging food prices caused by shortages of salad and vegetables. Rishi Sunak has previously vowed to halve the headline rate by the end of the year.
The Governor of the Bank of England attempted to reassure the public over both rampant price rises and fears of a banking crisis.
And offering a glimmer of hope, he claimed that inflation will have fallen sharply by the summer.
This graph shows the number of authorities levying various levels of Band D council tax
The economic shocks come just a day after figures showing an unexpected rise in inflation to 10.4 per cent – a blow to Rishi Sunak’s vow to halve inflation by the end of the year.
Food prices are going up by an eye-wateringly high 18.2 per cent – a 45 year high – amid salad and vegetable shortages while the price of going out for a pint has also spiked.
Mr Bailey said he expected galloping inflation to come down a lot by the time families are heading for their holidays this summer but hinted that rates could continue to climb until it is brought under control.
‘We know people are worried about the cost of living and they rightly think that inflation is too high’, Mr Bailey said.
‘They may also be worried about what they have been hearing about banks in recent days.
‘That’s why we have taken action on both.
Bills have risen rapidly in recent years. However, bus routes, street lights, recycling centres and community health could still all be cut back as town halls try to protect frontline services
‘Low and stable inflation is the foundation of a healthy economy. Raising rates is the best tool to bring inflation down.
‘We believe inflation will begin to fall quite rapidly before the summer.’
Chancellor Mr Hunt said: ‘With rising prices strangling growth and eroding family budgets, the sooner we grip inflation the better for everyone.
‘That’s why we support the Bank of England’s actions today and why we will continue to play our part in this fight by being responsible with the public finances, alongside providing cost of living support worth an average of £3,300 per household over this year and next.’
But Labour’s Shadow Chancellor Rachel Reeves said: ‘Today’s interest rate announcement will be a source of huge concern for families across the country who will be thinking about the impact this will have on their finances.
‘The Government think the cost of living crisis is over but the reality is that too many families are dealing with a Tory mortgage penalty and battling with soaring food prices.’
At last year’s Autumn Statement, Jeremy Hunt allowed local authorities to increase charges by as much as 5 per cent without holding a referendum
Money saving expert Martin Lewis has previously urged Britons worried about council tax rises to check if they are in the right band. If not, you could save thousands of pounds.
Lewis explained: ‘Once upon a time, way back in 1991, in time for the launch of its new council tax system, the Government needed every property in the land to be put in a valuation band.
‘But time was short, and the job large, so the people in charge asked estate agents and others to help.
‘Yet even with all the estate agents’ help, they didn’t have time to get the detailed information together, so they set about doing it quickly by pairing up and driving down countless streets, allocating each property a band with just a glance.
‘They became known as ‘second-gear valuations’ as they mostly never even stopped their cars, never mind got out of them.’
Therefore, many households have been on the wrong council tax band since 1991 and many find that they should be on a different band today.
This shows how much council tax bills will rise depending on what type of area you live in
You can challenge your band if you think it is wrong and recoup the money you might have overpaid.
However, it is worth noting that you might be re-banded and have to pay more council tax, so be careful before you do make the challenge.
Lewis explained that people in England and Wales should submit their challenges to the Valuation Office Agency (VOA), which you can access on the Government’s website.
Alternatively, you can call the VOA on 03000 501 501 for England or 03000 505 505 for Wales or email on [email protected].
You will need to give the addresses of up to five similar properties in a lower council tax band in your immediate area, plus give detailed information on the type of property you live in.
The challenging process is different if you live in Scotland and Lewis says that you should visit the Scottish government’s website for more information.
