The cost of living is already expected to soar in the months to come, but Russia’s invasion of Ukraine could put strained UK household budgets “on the hook”.
Putin’s assault on the country has pushed world nations to unleash a set of strict sanctions designed to cripple Russia’s economy, deescalate the situation and end the humanitarian crisis. But the impacts of sanctions – and the attacks on Ukraine, which exports a huge amount of essential goods – are likely to be felt closer to home too, affecting energy, food and petrol prices.
Bank of England analysts previously predicted that soaring inflation would hit seven per cent this April. However the latest developments in Eastern Europe could see UK prices hit that figure within weeks, economists warned.
From just £3 per week
It’s “hard to see how households’ real spending keeps rising,” Samuel Tombs, chief UK economist for Pantheon Macroeconomics, wrote on Twitter. The analyst revealed that he believes inflation could now peak at 8.2 per cent in April.
Households are bracing for living costs to increase in the coming months, despite hitting record highs already, when national insurance payments rise and the energy price cap is lifted to an average £2,000 annual fuel bill.
The rising costs come against a backdrop of stagnating wages and benefits for those on low incomes – set to rise just 3.1 per cent in April – failing to keep up with the real cost of daily essentials.