UK inflation, already at 40-year highs, could pass 13% in October, according to Bank of England forecasts. While wages have not kept pace with inflation, much of the expected squeeze on households and businesses is down to rising energy costs.
A spike in wholesale energy prices has fed into retail charges for businesses and households. While the government sets a price cap to try to protect consumers from sharp increases, it rises in line with market rates. This could cause average household bills to increase by more than £650 in January 2023 to the equivalent of £4,266 for the year - if no government action is taken.
Political leaders from all major UK parties have put forward proposals to relieve the cost of living crisis this winter. We asked four economists to discuss the suggestions so far and to outline the measures they believe could help relieve some of the pressure on UK households and businesses this year.
