UK households to suffer £4k blow to finances this year, says report

Adding to pressure on Rishi Sunak as the government prepares to scale back its support for energy bills this spring, the National Institute for Economic and Social Research (NIESR) said low and middle-income households were facing the biggest financial hit from the cost of living crisis.

“With the cost of living crisis having a lasting effect on households, for at least 7m, it will certainly feel like a recession,”the report said.

With high energy bills and the rising cost of a weekly shop, at least 7m households – about a quarter of the population – will be unable to meet in full their planned energy and food bills from their post-tax incomes, the report added.

Highlighting a return of a “squeezed middle” as high inflation erodes consumer spending power, it said an average middle-income household would face a hit to their personal disposable income of 13%, reaching up to £4,000 in the next financial year.

The figures come after the International Monetary Fund warned Britain was to become the only major industrialised country with a shrinking economy this year, with growth dragged down by high inflation, rising taxes and higher interest rates from the Bank of England.

Read more at The Guardian