𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Keir Starmer’s latest relaunch was already in tatters last night as industry leaders and his own MPs warned the cost of living crisis will continue in 2026. The Prime Minister vowed this would be the year “people begin to feel the difference in their pockets, in the ability to pay the bill”, as he visited a community centre in Reading to highlight a freeze in rail fares. He said: “2026 is the year that we’re going to be turning a corner.”

Sir Keir will tomorrow urge colleagues to focus on policies that raise living standards, when he chairs a meeting of his Cabinet in Number 10. But shops said checkout prices would continue to rise in 2026, while a left-leaning think tank said household incomes had stalled. Labour backbenchers also issued a blunt warning that the cost of living crisis has not been fixed. Pubs and restaurants are also braced for a dire 12 months as cash-strapped customers stay away.

A survey by the British Chambers of Commerce found four in ten bosses in pubs, restaurants and hotels expect turnover to fall in the next 12 months, with three in ten predicting an increase.

David Bharier, the British Chambers head of research, said: “Firms tell us they are worried about tax, struggling to invest and fear they’ll have to put their prices up in the months ahead.”

The British Retail Consortium, which represents shops, said the price of food will continue to rise in 2026 after checkout bills went up 3.3% last year.

Chief Executive Helen Dickinson said: “While falling energy prices and improved crop supply should help ease some cost pressures, increased public policy costs and regulation will likely keep inflation sticky.”

But household incomes will barely increase, with think tank the Resolution Foundation warning of “lacklustre real wage growth, and rising tax bills” in a report setting out its predictions for the new year.

Sir Keir is under pressure from Labour MPs, including former Transport Secretary Louse Haigh, to veer to the left. She signed a statement from the centre-left Tribune group of backbenchers which said the causes of the cost of living crisis “have not yet been fixed”.

The group said: “We must approach the economy differently. We must challenge the failing status quo. We must change how it is run once and for all.”

Sir Keir previously launched a “second phase” of his government in September last year.