Theresa May has been accused of refusing to accept that her hard Brexit stance has caused sterling to fall and hurt living standards.
It came as inflation reached its highest level for four years in April at 2.7 percent, after a weak pound, electricity price increases and rising air fairs pushed up the cost of living. Later this year, inflation is expected to reach up to 3 percent.
New ONS figures also showed that average wages increased by 2.1 percent during the first three months of 2017, the weakest rise since July 2016.
However, due to inflation of 2.3 percent during the same period, wages shrank by 0.2 percent in real terms – the first decrease since autumn 2014.
During her first joint press conference with Chancellor Philip Hammond, the Prime Minister rebuffed assertions that Brexit is responsible for the increased cost of living.
She said: “If you look at what happened to sterling, sterling had started to fall back before the referendum came through.
“So there have been adjustments to sterling. It isn’t just that sterling has gone down. We’ve seen currencies move around as currencies do.”
Liberal Democrat foreign affairs spokesperson, Tom Brake, said May is refusing to acknowledge the economic impact of leaving the EU because she is pursuing an “extreme version of Brexit.”
Former Labour shadow minister, Chris Leslie, said it was “absolutely clear” that the Tories “hard Brexit” was already hitting people’s pockets.
He said: “As wages shrink, prices are surging as the collapse in the value of the pound has pushed up the price of imported food, clothes and fuel.
“Working people are already becoming poorer as a result of the Prime Minister’s choice to pursue a hard, extreme Brexit.”
Unite general secretary Len McCluskey said rising inflation and falling wages demonstrated the Tories could not be trusted to run the country or negotiate a Brexit deal that would work for working people.
He said: “Working people and their communities are in the grip of the longest pay squeeze since Queen Victoria was on the throne. With no sign of letting up and inflation rising more and more, workers are under constant pressure to make ends meet.
“Working people need a Labour government. Only Labour will boost the minimum wage to £10 an hour and ensure working people can stand tall again by building an economy based on secure, decent jobs.”