economy
New UK cost of living crisis looms with soaring energy bills forecast to lift inflation
Latest reading on Wednesday likely to frame scale of challenge for new PM to ease pressures on households amid Iran war fallout
TL;DR
- UK households face a renewed cost of living squeeze due to soaring energy bills.
- Inflation is forecast to rise to 2.9% in July, up from 2.6% in June.
- The Bank of England is considering interest rate hikes as early as September.
- Potential 'surge pricing' for water usage during droughts is being considered by Ofwat.
- Global energy market volatility, linked to the Iran war, is contributing to inflationary pressures.
- The government faces challenges in easing financial pressure on households and businesses.
- Bank of England predicts UK inflation could reach 3.2% by year-end.
- New Prime Minister Andy Burnham announced measures like a VAT cut on electricity bills.