Millions of people have been told the cost of living crisis could last until 2023 with things only becoming more stable in 2024
The Governor of the Bank of England warned today (February 4) that inflation may not recover to normal levels for another two years and pay squeezes are expected.
Andrew Bailey told BBC Radio 4’s Today programme: “It is going to be a difficult period ahead, I readily admit, because we all get we are already seeing and we’re going to see a reduction in real income.
“Based on what we see today, I would expect that, so we’re going to start coming out of it in 2023, and two years from now we expect we’ll be back on to a more stable – certainly inflation – back to a more stable position.”
His comments came after the Bank said inflation is likely to hit 7.25 per cent in April.
The Governor also encouraged companies not to give staff big pay rises to combat inflation, warning it could lead to a spiral of high prices followed by high wages, sending inflation higher.
He said: “I’m not saying don’t give yourself a pay rise. This is about the size of it (any rise)… we do need to see restraint.”
The jump in the cost of living is putting household budgets under pressure, with some having to choose between heating and eating.
Here are some resources available if you need help.
Citizens Advice is an independent charity offering free, confidential support with legal, consumer, housing, debt and other problems. its site details what help is available and where your nearest bureau is, for face-to-face advice.
Helpline: 0800 144 8848 in England / 0800 702 2020 in Wales (open 09.00 – 17.00 Monday-Friday)
The Trussell Trust
The Trussell Trust supports a national network of more than 1,200 food banks, providing emergency food for free to those who need it. You can use it site to locate support wherever you live.
Helpline: 0808 208 2138 (open 09.00 – 17.00 Monday-Friday)
Turn2us is a national charity providing practical support to people who are struggling financially. its site includes a benefits calculator and details of schemes and grants in your area, including for energy and water bills.
Helpline: 0808 802 2000 (open 09.00 – 17.00 Monday-Friday)
Mr Bailey added: “We think that some of the bottlenecks around the world that have been causing disruption to the supply of goods and have been pushing prices up are starting to ease.
“We think there are good reasons to believe energy prices will start to ease, not least because they are somewhat seasonal. There are risks on both sides of that. It’s possible that energy prices will come down more rapidly because they’re so elevated at the moment.”