Consumers, faced with rising living costs, have started to cut back on food spending and reduce their gas and electricity use at home, as concerns grow about the impact of rising prices on the UK’s poorest households.
According to a comprehensive survey of more than 13,000 adults in the UK, the Office for National Statistics (ONS) said 83% experienced an increase in their cost of living this month, up from 62% in November.
As electricity bills and weekly groceries rose, the ONS said that 34% of those reporting rising living costs said they were using less gas and electricity at home, while 31% said they were spending less on groceries. Half of them did without the insignificant.
ONS figures raise concerns that some of Britain’s poorest are being forced to make tough choices between heating and eating.
They underscore comments by Bank of England Deputy Governor Ben Broadbent on Wednesday that Russia’s invasion of Ukraine had dealt the UK economy the biggest external hit yet.
“From an economic perspective, on top of the already very steep rise in the cost of globally traded goods in the wake of the pandemic, the invasion has resulted in a significant increase in the cost of energy and other commodities.
“As a large net importer of manufacturers and commodities, it is doubtful the UK has ever experienced an external hit to real national income on this scale,” he said.
Household gas and electricity bills are expected to rise 54% from Friday, with charities warning of a sharp rise in poverty without more government support for the poorest families.
The average Band D tax bill in England is also expected to rise by £67 to almost £2,000 a year on Friday.
The UK’s annual inflation rate hit 6.2% in February – the highest in three decades – amid rising energy costs, soaring food and drink prices and record petrol prices. With household energy prices set to rise from April, the Bank of England expects inflation to hit 8% this spring and has warned it could rise to almost 10% later this year.
Official forecasts show Britain this year is on track to fall in living standards every year since modern records began in 1956. Highlighting the risk to disadvantaged families, the ONS said up to 29% of adults could not afford an unexpected but necessary event at a cost of £850.
Those on the lowest incomes, renters and those without formal qualifications were the most likely to be unable to afford such unexpected expenses. Parents of dependent children, divorced or separated children, disabled adults and people living outside of London and southern England have also been less successful.
The Government has announced a £9 billion support package of tax breaks and community loans, although Rishi Sunak was criticized in his spring statement last week for prioritizing tax cuts over increasing the value of universal credit benefits, despite pressure for more to do to help low-income households.
Frances O’Grady, the general secretary of the TUC, said the government urgently needed more support. “With energy bills set to skyrocket by £700 next month and hundreds more in the autumn, many households will be pushed into the red.
“Ministers need to do a lot more to help people get through this cost of living crisis. The support announced so far by the chancellor has been little more than thin mush.”