Soaring inflation and sluggish growth under Labour have sparked fears of a new era of ‘stagflation’ for the British economy — now use our interactive calculator to work out the effect on your cost of living.

Yesterday it was revealed that the consumer prices index (CPI) rate of inflation had soared to a 10-month high of 3 per cent in January – higher than predicted by economists.

A major driver of infaltion was an increase in private school fees, the Office for National Statistics (ONS) said, after Labour slapped VAT on fees as part of their tax-hiking agenda.

More expensive plane fares and spiralling food costs also contributed to higher living costs, according to the ONS.

The latest inflation data is another blow to Chancellor Rachel Reeves, who has faced huge questions over her stewardship of the economy since her controversial Budget last October.

Tory leader Kemi Badenoch said family finances were being hit ‘as a direct result of Keir Starmer and Rachel Reeves’ economically illiterate decisions’.

‘They are out of their depth, out of ideas and hopelessly out of touch with the British people,’ she added.

The Liberal Democrats echoed warnings by experts of ‘stagflation’, a term used to describe a damaging combination of high inflation, stagnant growth and high unemployment.

The ONS has a calculator which allows you to see how much inflation has hit your pocket, taking into account the most up-to-date figures.

The tool asks you to enter your monthly spend on categories such as groceries, transport and leisure.

Using the latest inflation data, it then calculates the estimated increase in your monthly spend between January 2024 and 2025. It also shows which areas have been the biggest contributors to your cost-of-living increase.

Responding to inflation hitting the highest level since March 2024, Ms Reeves said her ‘number one mission’ was getting ‘more pounds in pockets’.

She said: ‘That’s why we’re going further and faster to deliver economic growth.

‘By taking on the blockers to get Britain building again, investing to rebuild our roads, rail and energy infrastructure and ripping up unnecessary regulation, we will kick-start growth, secure well-paid jobs and get more pounds in pockets.’

There will also be increased pressure on the Bank of England to consider further interest rate cuts in their bid to keep inflation around their 2 per cent target rate.

Ms Reeves – who has faced fresh scrutiny this week about the accuracy of her CV – is under huge pressure ahead of her spring statement next month.

In order to keep within her ‘iron-clad’ fiscal rules, the Chancellor is likely to have to cut spending by more than she planned if she wants to dodge further tax hikes.

Amid stalling growth and spiking debt interest costs, Ms Reeves is believed to have seen the near-£10billion ‘headroom’ she built into her sums in October completely wiped out.

Policing minister Dame Diana Johnson tried to defend Labour’s record in interviews yesterday, describing inflation jumping to 3 per cent as a ‘bump in the road’.

She told Sky News: ‘I’m going to say to you that we’ve only been in power seven months.

The higher-than-expected rise in inflation will represent a huge blow to Rachel Reeves, pictured out running this week, who is facing huge questions over her stewardship of the economy

‘We’ve had 14 years of economic stagnation, so I think there’s obviously work that’s under way with the Chancellor.

‘But I know that the IMF and the OECD are saying that we’re going to have the fastest-growing economy in Europe.’

Tory shadow chancellor Mel Stride said: ‘The inflation figures mean further pain for family finances – and it’s thanks to the Labour Chancellor’s record tax hikes and inflation busting pay rises.

‘Labour were warned that their tax spending and borrowing spree would drive up inflation.

‘It means higher prices in the shops, and interest rates staying higher for longer, causing mortgage misery for millions.

‘This Chancellor is out of her depth, and we’re all paying the price.’

Lib Dem leader Sir Ed Davey said: ‘The Chancellor’s misguided policies are putting us at risk of a new era of stagflation.

‘The economy still isn’t growing, and now people are being hit in their pockets too.

‘The Conservative Government plunged Britain into a cost of living crisis, and Labour’s failures are just making the misery drag on and on.

‘The Government urgently needs to change course and take real action to get our economy growing strongly and bring down the cost of living, starting by can.’

Ms Reeves held talks with Britain’s top bankers as she continued her scramble for economic growth.

The Chancellor met with bosses from JP Morgan, Blackrock, Abrdn, Morgan Stanley, Goldman Sachs, Citi, Fidelity and Schroders in Downing Street this morning.

She told the City chiefs she wants to go ‘further and faster’ to drive growth in the UK, with GDP having increased by only 0.1 per cent in the final three months of last year.

This followed no growth at all between August and September 2024, which had left Britain at threat of recession.

Ms Reeves has been accused of ‘killing growth’ by battering businesses with her tax-hiking Budget in October last year.