BRITS face a “£1,200 hit to incomes” after a double whammy impact of inflation and weak growth, the Bank of England have warned.
It comes after bosses at the Bank said inflation is set to reach a 30-year high of more than 10.25 PERCENT by the Autumn.
Brits are already making major changes to their spending amid the cost of living crisisCredit: Getty
Andrew Bailey said he recognised the hardship inflation and no growth will cause for many people in the UKCredit: AFP
That figure is five times the Bank’s target rate of 2 percent and will force millions to tighten their belts yet further amid the soaring cost of living crisis.
Such a rise will likely plunge the UK into a bitter recession by the end of the year.
Brits are already making major changes to their spending as the average household is forced to shell out an extra £700 per year for gas and electricity.
Food prices have also rocketed in recent weeks as the fallout of the war in Ukraine has sent staples such as wheat soaring by almost 20 percent.
While chicken could also out cluck beef as the most expensive meat in Britain as prices per kilo of meat are now on par in most supermarkets.
Bank bosses have also warned the UK economy is set to go into reverse by the end of 2022 while growth is set to flatline at zero for years to come as spending collapses.
And it will be the poorest hit hardest, Bank experts warn.
Andrew Bailey, the Bank’s governor, said: “I recognise the hardship this will cause for many people in the UK, particularly those on the lowest incomes, often with little or no savings…
“Who are hit hardest by increases in the prices of basic necessities like food and energy.”
This comes alongside warnings that the UK is heading towards a “sharp economic slowdown” after interests rates rose from 0.75 to 1 percent.
That is the highest level since February 2009 and the fourth consecutive increase since December last year.
As a result of soaring interest rates, two million homeowners will see an immediate increase in their monthly mortgage repayments.
Unemployment is also set to rocket from 4 percent to 5.5 per cent or more, the Bank warned.
Despite the warning, Chancellor Rishi Sunak has no plans to announce extra support for households before the autumn, the i reported.
It comes as Prime Minister Boris Johnson told Good Morning Britain’s Susanna Reid “there is more that we can do” to help with the soaring cost of living.
Speaking to the ITV show on Tuesday, the Prime Minister added “particular hardship” should be “looked after by their councils”.
But he strayed clear of promising extra benefits, warning of “very severe” inflationary risk that “could get worse”, with a knock-on effect on interest rates if benefits are increased.
He acknowledged the support currently available – a £150 council tax cut and the £200 rebate off energy – isn’t “going to be enough immediately to help everybody’s costs”.
His grilling came days after Rishi Sunak warned mortgage repayments could rise by a whopping £1,000 a year – at the same time bills for energy, petrol and food are also rising.
Millions of Brits have been plunged into financial crisis amid the soaring cost of livingCredit: Getty