The UK is facing the biggest decline in living standards since comparable records began in the 1950s, according to an independent forecast.
The London-based Centre for Economics and Business Research (CEBR) released a report on Monday, saying that the “cost of living crisis” has “well and truly” arrived in the UK. CEBR cites the recent uprating of the energy price cap – reflecting the global rise in energy costs – as the reason, saying that average UK households will be paying a whopping 73% more for their energy bill than compared to a year ago. In addition, petrol prices are up by 30% on the year and diesel prices are 36% higher, the report says.
According to the consultancy, in the coming months the consumer price inflation will far outstrip wage growth, jumping by a further 2.5% from its February level of 6.2%, which was the highest in 30 years. While most forecasts expect the UK economy to grow in each quarter of 2022, the energy price crisis will still see the households notably worse off, CEBR notes.
The Bank of England warned in March that inflation in the country is set to hit a 40-year high of 8.7% at the end of the year due to a rise in global energy prices over the past few months. The governor of the Bank of England, Andrew Bailey, also said last month that Britain was heading for the biggest single shock from energy prices since the 1970s, with the economy set to suffer a growth slowdown.
Energy prices have been rising globally over the past six months but the West’s economic war with Moscow has exacerbated the problem. The UK joined the US and the EU in imposing several rounds of sanctions against Russia, a major energy supplier to Europe. Western countries have pledged to end all imports of Russian coal by the end of this year, to be followed by a ban on imports of oil and natural gas in the coming years.
