Millions of households are set to be several hundred pounds worse off next year, a government watchdog has warned. It comes amid growing fears that the UK will be plunged into recession in the next 12 months.
The Office for Budgetary Responsibility, which gives independent analysis of the UK’s public finances, estimates millions of households will be £1,200 poorer by 2023 as the price of goods and services continues to spiral. As BirminghamLive reports, the watchdog said: “Many threats remain, with rising inflation potentially tipping the economy into recession, continued uncertainty about our future trading relationship with the EU, a resurgence in Covid cases, a changing global climate and rising interest rates all continuing to hang over the fiscal outlook.”
Treasury minister Simon Clarke said: “The government is ensuring it continues to support people and the economy in the face of global pressures and uncertainty while reducing debt.” Labour’s shadow chancellor Rachel Reeves said: “We need a serious plan for growth and a stronger, more secure economy."
The latest report from the Office for Budget Responsibility deals a blow to the hopes of Boris Johnson's potential successors to promise a raft of tax cuts in response to the cost-of-living crisis. Bills are skyrocketing for many households with energy prices already soaring ahead of yet another price cap hike this October.
Others are dealing with rises in council tax and National Insurance contributions. Inflation, too, has soared in recent times, with warnings of crop shortages amid a crisis in Ukraine after Russia's attack.
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