Cost of living warning to families as household incomes predicted to fall again next year
dailyrecord.co.ukA think-tank has warned that families are facing a "groundhog year" as further squeezes on living standards look set to continue into 2023.
The Resolution Foundation said that while there are signs inflation will ease and interest rates peak lower than feared, family finances face a repeat of 2022's cost of living challenges.The Foundation described 2022 as horrendous, with real household disposable income falling by 3.3%, or £800 per household, over the course of the year, marking the biggest annual fall in a century.
Inflation may already have peaked at 11.1% in October and wholesale energy prices have fallen significantly, the Foundation said.It said that firms have also been reporting that recruitment difficulties are easing.
But it added that in 2023, households are set for a further squeeze in their living standards and incomes are forecast to fall by 3.8%.This comes despite benefits and the National Living Wage being set for rises of 10.1% and 9.7% respectively in April, it said.Pay is set to continue falling in real terms until the second half of 2023, and is unlikely to even return to its current level until the second half of 2024, according to the think-tank, which is focused on improving living standards for those on low to middle incomes.Household spending on energy bills is expected to reach a record high as retail prices rise further and UK Government support is scaled back.
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