Workers facing renewed cost-of-living squeeze, report warns

Workers are being exposed to higher prices, threatening a renewed cost-of-living squeeze, according to a report.

The Work Foundation said households face rising energy bills, stalling wage growth and a weakening labour market.

Its survey of 1,000 senior business leaders found just over one in five employers are planning to provide pay rises above inflation this year.

Higher energy and fuel costs, driven by ongoing instability in the Middle East, could push workers into a renewed period of shrinking real wages, the report warned.

The research suggests most businesses are providing some support to staff to help deal with rising costs, including extending benefits options, although one in seven respondents said they are not providing any cost-of-living support.

Ben Harrison, director of the Work Foundation at Lancaster University, said: “A sluggish economy and ongoing global instability risks further intensifying cost-of-living pressures that workers across the country are already facing.

“Repeated periods of stagnant wage growth and sustained increases in the cost of essentials have left many households with little financial resilience to cope with any further economic shocks.

“Most employers are actively looking for ways to support their staff, but many are facing the pressures of rising costs too.

“This underlines the importance of Andy Burnham’s recent promise to prioritise short-term cost-of-living relief, and for the Government to focus on delivering good growth in every postcode in the years ahead.”

Published: 17/07/2026 by Radio NewsHub