How soaring inflation will affect your household finances over the next few months

dailyrecord.co.uk:

Households are facing the highest inflation rates for 40 years and the cost of living squeeze on already tightened budgets is expected to get even worse over the coming months.

While energy bills are the main driving force behind the rise in inflation to 9% in April, millions of people across the UK are now being hit with price hikes across most of their daily essentials such as food, fuel and clothing.

Here is an overview of what is causing the crippling cost crunch, what action is being taken to combat it and what households can expect over the next few months.

Inflation was already rising at a fast clip after Covid-19 hit global supply chains with a combination of pent-up demand and delays to shipping as factories across the world face lockdowns and worker absences.But the Ukraine war has compounded the problem, sending the price of fuel and energy to record levels in recent months as the full impact of Russia’s invasion and the sanctions against President Vladimir Putin’s regime unfold.The conflict is also sending food prices jumping higher due to the knock-on effect on some key ingredients, such as cooking oil and wheat, given that Ukraine and Russia are major producers of these commodities.Consumer Prices Index inflation is currently running at its highest level since 1982, due largely to April’s 54% rise in the energy price cap.Unfortunately there is nothing but bad news on the horizon.Inflation is expected to rise even higher later this year when the next energy price cap review takes effect in October.The Bank of England predicts inflation will peak at an eye-watering 10.25% in the autumn, which it has cautioned will leave the UK on the brink of recession as households rein in their spending.The Office for