The Bank of England has warned of a soon to be realised dramatic increase in cost of living statistics. The bank says that the increase is because of the 20 per cent VAT rise, the increase in commodity prices, and the upsurge of power bills.
The increase will put a stranglehold on UK households already in the vice grip of economic debt. More than 50 per cent of people with unsecured debt such as personal loans or credit cards are already struggling. This comes on the heels of another warning given by The Bank of England, regarding the rise of inflation.
The bank is now predicting a rise in inflation even higher than it speculated only three months ago and that inflation will stay elevated for quite some time.
This is followed by a study undertaken by Bright Grey insurance, which reports that too many UK consumers live well beyond their means. They report that their study has shown that the average woman spends £600 beyond her monthly income and men spend nearly £150.
The rising cost of food driven by commodity prices, the VAT increase, and the rise in energy costs can only push inflation upward. Today’s job market being what it is, there is very little chance that pay rates will increase enough to catch inflation for years.
Meanwhile people are losing jobs and credit cards are raising interest rates. Experts warn that the sharp rises predicted in staple costs like food, clothing, and power can only lead to further economic chaos as people try to maintain their lifestyle with less and less money.