Families are facing a “groundhog year” as further squeezes on living standards take place in 2023, a think-tank has warned. While the year ahead may offer economic policymakers some relief, with signs inflation will ease and interest rates will peak lower than feared, family finances face a repeat of 2022’s squeeze as the cost-of-living crisis deepens, according to the Resolution Foundation’s new year outlook.
The Foundation described 2022 as horrendous, with real household disposable income falling by 3.3%, or £800 per household, over the course of the year, marking the biggest annual fall in a century.
Inflation may already have peaked at 11.1% in October and wholesale energy prices have fallen significantly, the Foundation said. It said that firms have also been reporting that recruitment difficulties are easing.
