By Noor Nanji, Business reporter, BBC News
An estimated 1.5 million households across the UK will struggle to pay food and energy bills over the next year, as rising prices and higher taxes squeeze budgets, according to new research.
The National Institute of Economic and Social Research (NIESR) predicted the UK will fall into recession this year. It urged the Chancellor to do more to stop people sliding into debt and destitution. The Treasury said it is providing support to households. Labour’s shadow chancellor Rachel Reeves said the Queen’s Speech had fallen short on the cost of living.
In its latest quarterly outlook of the UK economy, NIESR warned that a combination of rising prices and measures announced in the Chancellor’s Spring Statement – such as the decision not to scrap a planned rise in National Insurance tax – are hitting the poorest households hardest.
Inflation – the rate at which prices rise – is at a 30-year high, as the Ukraine war drives up fuel and energy prices. The Bank of England has warned inflation might reach 10% within months.
“Without this targeted support we expect a further increase in extreme poverty,” the think tank said, with about a quarter of a million households sliding into extreme poverty, taking the number to about a million.
About half a million households would “face the choice between eating and heating” without these payments, it said, adding that the chancellor had a reported £20bn of “headroom” for government spending that could be used to cushion the shock to income.
SOURCE: BBC.COM
