Households face an “overnight cost of living catastrophe” in April, when £1200 of tax rises and energy bill increases kick in, analysts warn.
Boris Johnson’s manifesto-busting tax hikes along with changes to the energy cap will pile pressure on budgets when the new financial year starts, according to the Resolution Foundation.
Its latest Labour Market Outlook predicts a “year of the squeeze”, with inflation, now at 5.1 per cent, peaking at six per cent, its highest since 1992, in the spring.
Real wages will be just 0.1 per cent higher at the end of 2022 than at the start. And by the end of 2024, real wages are set to be £740 a year lower than if pre-pandemic pay growth had continued.
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