Many families had hoped their monthly costs would rise with energy price caps and national insurance increases, but the Organization of Resolutions has now warned the Ukraine conflict will push the cost of living even higher. .
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The Resolution Foundation says families are facing the biggest drop in income since the mid-1970s, driven by rising prices due to increase national insurance tax.
Many families have expected their monthly spending to increase when energy price limit leap in April, but the Organization says the Ukraine conflict will push the cost of living even higher when the prices of fuel and other goods soar.
It expects inflation, a measure of how the cost of living changes over time, to peak in April at 8.3%. This is much higher than the Bank of England forecast of 7.25% in February.
“The crisis in Ukraine has increased both the scale of price increases but also increased uncertainty about their magnitude and duration,” the Fund report said.
“The UK’s post-Covid economic recovery is going well, but a deep recession in living standards is continuing,” it added, warning that wages were also not forecast to rise. fast.
Its economist, Adam Cortlett, said the skyrocketing bills would hit low- and middle-income families hardest.
He also suggested that poorer households would face a “roller coaster of living standards” because of how benefits are paid in advance every month.
For example, most working-age benefits and state pensions will increase by 3.1% in April – a time when cost-of-living increases can be as high as 8%. But high inflation in 2022 will lead to larger payments next year.
The think tank has called on the Chancellor Rishi Sunak to announce new support for struggling families at his Spring Statement.
Torsten Bell, executive director of the Resolution Foundation, said: “Although the economic impact of the war will appear to be insignificant compared to the suffering millions of Ukrainians will experience, it will still have a significant impact. significant impact in the UK.”
He said higher gasoline and oil prices would exacerbate the “cost of living crisis”, causing “a significant squeeze on family incomes”.
A government spokesman said: “We recognize the pressures people are facing with the cost of living which is why we are providing around £20 billion worth of support in this financial year and the next is to help.”
They added: “We have also raised the minimum wage by more than £1,000 a year for full-time workers and our £500 million Household Support Fund is helping the most vulnerable. most with essential costs”.
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https://www.mirror.co.uk/money/families-1000-worse-biggest-income-26411888 Families getting worse off £1,000 is the 'biggest drop in income since the 1970s'