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Cost of living rises in UK

todayMarch 24, 2022 3

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The Resolution Foundation warns that the war in Ukraine will push up energy prices and see UK families squeezed even further. Incomes are expected to fall by about £1,000 this year, the biggest real-terms fall in incomes since the mid-1970s. The government spokesperson said it recognized the pressures households are facing. Families were already expecting their monthly spending to go up when the energy price cap jumps in April, and National Insurance contributions rise. But in a new report, the Resolution Foundation said the Ukraine conflict would push up living costs even further as the prices of fuel and other goods surged. It expects inflation, which measures how the cost of living changes over time, to peak in April at 8.3%. That is much higher than the Bank of England’s forecast of 7.25% back in February. At the start of April, spikes in global oil and gas prices from last year started to feed through to our energy bills.” The crisis in Ukraine has increased both the scale of price rises but also the degree of uncertainty about their levels and duration,” the Foundation reported. Its principal economist, Adam Cortlett, said soaring bills would hit low and middle-income families the hardest. He also suggested poorer households would face a “living standards rollercoaster” because of the way that benefit payments are set months in advance. For example, most working-age benefits and the state pension are due to rise by 3.1% in April – a time when the increase in the cost of living could be as high as 8%. But high inflation in 2022 should lead to bigger payments in the year to come.
“The UK’s post-Covid economic recovery is well underway, but a deep living standards downturn is just getting going,” it added, also warning that wages are not forecast to grow particularly fast either.

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