As Chancellor John Healey applies the finishing touches to his first Budget, families across England describe a relentless cost of living squeeze. Dawn Fazackerley-King, a self-employed Pilates instructor in Ipswich, faces her mortgage rate jumping from 1.4% to around 5.3%, adding an estimated £250 to her monthly outgoings. ‘There’s just no more fat to trim,’ she told the BBC.
Fazackerley-King, 42, and her husband, who works in an office, have a household income of about £70,000 a year. She says her family’s direct debits contain ‘nothing fancy,’ and that recent years have been about ‘trimming the fat accordingly.’
An Office for National Statistics survey in August found 55% of adults reported an increased cost of living, down from a peak of 79% in April but reflecting what the BBC calls a ‘chronic,’ long-term issue. Food, fuel, and energy bills remain the primary drivers.
In response, Prime Minister Andy Burnham has promised ‘breathing space,’ announcing a £2 cap on most single bus fares in England, a cut to VAT on domestic electricity bills, and plans to remove standing charges on gas. Healey has pledged a Budget that delivers ‘growth in every postcode’ while sticking to Labour’s commitment not to hike income tax, National Insurance, or VAT.
Jessica Taylor, a single mother of an 11-year-old son from Clacton-on-Sea, says her income of around £26,000 leaves her living ‘month to month.’ She recalls explaining to her son that ‘on paper we live month to month’ and that losing her job would leave them with a month or two before facing real hardship. Her mother, Karen Badenoch, who runs the community interest company Trusted Money Confidence, says they often see working people ‘racking up debts on credit cards and buy-now-pay-later just to be able to get to the end of the month.’
While Fazackerley-King welcomed moves on standing charges, she described the government’s overall approach as ‘trying to put sticking plasters over gaping wounds.’ Her message to the prime minister and chancellor is direct: ‘Please start listening. The cost of living is becoming unbearable and I don’t feel that the government are always hearing that message.’ The Office for Budget Responsibility forecasts real household disposable income will grow by an average of 0.75% a year between 2026 and 2030, compared with 3% a year between 2000 and 2007.
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Adults saying their cost of living had increased compared with the previous month, ONS survey
% of adults responding
Bars are in date order but are not evenly spaced in time: the gap from August 2025 to April 2026 is longer than from April to August 2026. Source: Office for National Statistics survey, as reported by BBC News
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Analysis
Why This Matters
The Budget is the government’s first major test on the economy, directly impacting millions of households struggling with chronic high costs.
The ‘squeezed middle’ is a crucial political demographic; their financial trajectory will shape consumer confidence and the national recovery narrative.
The disconnect between government promises of ‘breathing space’ and voters feeling ignored presents a significant communications challenge for ministers.
Background
The term ‘squeezed middle’ entered the political lexicon under former Labour leader Ed Miliband around 2010 and became the Oxford English Dictionary’s expression of the year in 2011. The UK has endured a prolonged cost of living crisis since the energy price surge in 2022. While headline inflation has fallen, high prices have become embedded in household budgets. Labour entered government vowing to fix the economy and has since pursued a strict fiscal orthodoxy, ruling out increases to the three main taxes.
Key Perspectives
Dawn Fazackerley-King (Ipswich resident): Feels the government is failing to hear the scale of the problem, describing measures as ‘sticking plasters over gaping wounds.’
Jessica Taylor (Clacton-on-Sea resident): Lives month to month and fears a single financial shock could tip her family into real poverty.
Karen Badenoch (Trusted Money Confidence): Advises openness about finances, observing many working people depend on debt to get through the month.
Andy Burnham (Prime Minister): Promises ‘breathing space’ through targeted measures including a bus fare cap, VAT cuts on electricity, and scrapping gas standing charges.
John Healey (Chancellor): Pledges a Budget focused on growth and fiscal discipline, without raising the main taxes.
What to Watch
Wednesday’s Budget speech: Watch for specific new cost of living measures beyond those already announced.
The Bank of England’s next rate decision: Mortgage renewals represent the single biggest financial cliff edge for many families.
OBR forecasts: The official growth and household income projections will set the benchmark against which the government is judged.
9 claims in this story checked against 1 source: 3 supported.
Show each claim
Partly supportedThe headline presents UK families as gauging Healey’s first Budget.BBC News: “As Chancellor John Healey puts the final touches to his first Budget, how are the “squeezed middle” feeling after years of cost-of-living pressure?”
Partly supportedThe summary says voters welcome targeted relief but warn of “sticking plasters over gaping wounds”.BBC News: “While welcoming the move on standing charges, Dawn says ministers had been “trying to put sticking plasters over gaping wounds””
Partly supportedFazackerley-King’s mortgage rate is set to jump from 1.4% to about 5.3%, adding an estimated £250 a month.BBC News: “The interest rate on their Ipswich home loan could rise from 1.4% to about 5.3%, which, Dawn says, could add “about £250 extra a month just for living in the same property”.”
SupportedFazackerley-King said, “There’s just no more fat to trim.”BBC News: ““There’s just no more fat to trim,” says the mother-of-two.”
Partly supportedThe August survey found 55% of adults reported rising living costs, down from a peak of 79% in April.BBC News: “In August 55% of adults that responded to an Office for National Statistics survey, external said their cost of living had increased compared with the previous month. That rate was lower than the 62% recorded in August 2025 and lower than the 79% who said so in April this year.”
Partly supportedFood, fuel and energy bills remain the primary drivers of the cost-of-living squeeze.BBC News: “For those who said costs were up, the most common reasons were the price of food shopping, fuel and energy bills.”
Partly supportedFazackerley-King described the government’s overall approach as “trying to put sticking plasters over gaping wounds”.BBC News: “While welcoming the move on standing charges, Dawn says ministers had been “trying to put sticking plasters over gaping wounds”, which were “not fixing the problems”.”
SupportedHealey’s Budget will deliver “growth in every postcode”.BBC News: “He recently also said it would deliver “growth in every postcode, while giving businesses and families some breathing space”.”
SupportedThe OBR forecasts real household disposable income will grow by 0.75% a year on average from 2026 to 2030, compared with 3% a year from 2000 to 2007.BBC News: “The Office for Budget Responsibility, which independently analyses the UK’s public finances, predicted “real household disposable income, external” would increase by an average of 0.75% a year between 2026 and 2030. The same rate – which balances income, taxes and benefits, and costs – grew by an average of 3% a year between 2000 and 2007.”