Cost of living crisis hits UK, about to get worse

People across Britain will face difficult choices to warm their homes in the coming months with energy costs for millions of households in the UK surging by a whopping 54 percent, effective April 1.

It is the second major hike in energy bills since last October, and a third increase might be in store as rebounding demand from the COVID-19 pandemic and the persisting Ukraine conflict push prices for oil and natural gas higher in the United Kingdom, local press reports said Friday.

According to the reports, energy costs are the prime driver of soaring consumer prices in Britain because the country is more exposed to rising natural gas prices than even its gas-reliant European neighbors, where utility bills and other costs have also surged.

This is while prices for natural gas, which is used for electricity and heating, have more than doubled in the past year.

British economists warn of the biggest drop in living standards since the mid-1950s, fueled by skyrocketing energy costs, food prices and preplanned tax hikes. Additionally, disposable household incomes -- adjusted for inflation -- are expected to fall by an average 2.2 percent this year, according to the Office for Budget Responsibility.

Those figures obscure the impact on low-income people disproportionately affected by the crisis, since they spend a larger percentage of their budgets on food and energy.

The poorest quarter of British households will see their actual incomes drop by six percent this year, according to the Joseph Rowntree Foundation, a think tank focused on improving living standards.

Moreover, Britons that rely on government benefits and state pensions are being doubly impacted because their annual cost-of-living adjustment was based on annual inflation figures through September – before consumer prices surged.

That means while benefits are set to climb by just 3.1 percent this year, inflation soared to a 30-year high of 6.2 percent in February and is expected to peak at eight percent this year as the Ukraine conflict sends food and energy prices ever higher, the Bank of England predicted.

ME