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Can UK households weather a cost of living squeeze?

Alpesh Paleja
Alpesh Paleja Chief Economist, CBI

CPI inflation has been rising persistently over the past year, and is set to pick up even further.

24 Jan 2022, 5 min read

Summary

  • A widely anticipated rise in Ofgem’s energy price cap should push CPI Inflation to a peak of 6.0% or higher in April
  • Living standards have already taken a hit and, due to further rises in inflation, real wages are likely to fall for much of this year
  • On the flip side, there are some support mechanisms that may help some households weather a cost of living squeeze – notably, strong growth in the labour market and a chunk of excess savings built up during the pande

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