Millions of households are fed-up to the back teeth of everyday bills heading only one way.
It’s a constant grind of running to stand still, at best, in the face of the drain on family finances from higher energy and food to water, rent or other housing costs.
It needn’t have been this way by now. After years of enduring the cost of living squeeze, families started the year being told there was every chance bills would start to fall. Then came late February and US Donald Trump and Israel went to war with Iran.
Wherever you stand on the rights and wrongs of the conflict, events thousands of miles away have washed up on our shores through spiralling oil and other energy prices, with a spill-over to government and household borrowing costs. Trump’s deluded claims that the war would be over quickly have been exposed as shamefully naive.
And yet beyond the chaos unleashed in the region, there is the price being paid by everyone else. Take pump prices, which soared in the wake of the war, eased with hopes of peace, and have now leapt again as hostilities drag on.
Since the start of this month, the cost of filling a family car has already risen by almost £5, to £94 for petrol and £106 for diesel. That’s a fiver-a-go that can’t be spent by households on actually enjoying themselves, let alone giving the economy a boost. And it’s extra expense for producers and hauliers, driving up the cost of everything that’s transported by road.
Motorists are back to wincing when they pull up at the pump, shaking their heads in disbelief as petrol averages 171p a litre – a four year high – and diesel at almost 193p, and at risk of breaking the £2 barrier.
It the same for energy, with hopes that bills would be falling by now, but instead on the rise because of the fall-out from the war. Ofgem’s price cap increases by 4% in a fortnight’s time and there are very real warnings that it could leap by 25% in January, in the depths of winter.
Food price inflation hasn’t been as severe as some experts had predicted this year, though try telling that to the average family who’ve seen the cost of the weekly shop leapt. But then came this summer’s droughts, which crippled crops and are threaten higher prices in the months ahead.
All of which means long suffering households should buckle up and prepare for new bout of cost of living pain. Inflation has now risen to 3.1% and there are predictions it could reach 4% by early next year.
The Bank of England, whose task let’s not forget is to try and get inflation to 2%, is toying with a rise interest rates. Talk is of the next hike – to 4% – coming when the Bank’s monetary policy committee means on November 5, a week after Chancellor John Healey delivers his first Budget. Higher rates means mortgage shocks for even more borrowers.
And it will be to the Budget that many households will be looking for help, whether with energy bills, fuel duty or, at the very least, no tax rises that will be another whack to their wallets.
Yet the Chancellor has precious little cash to splash, with bond markets looking instead for signs of spending cuts or measures to tackle the UK’s ballooning debt mountain.
