Falling living standards in store for nation
The new deputy governor of the Bank of England, Charlie Bean, has warned the nation that it needs to brace itself for a year of hardship, stating that they will have to face falling living standards over the next twelve months. Mr Bean said that soaring inflation levels and rising oil prices were set to cause further financial misery for consumers, and he added that the nation was facing the toughest time since the early 1990s and perhaps even earlier. Inflation levels have now soared to 3.8%, which is nearly double the government target.
Bean said: ‘As a nation, it means that our living standards will be lower than they would otherwise be. Real living standards will have to grow less rapidly this year, and possibly part of next year, than was the case in the late 1990s and early 2000s. ‘There is not very much that we can do about that as a nation unless we improve our productivity to offset it.’
He also went on to state that oil prices were likely to continue rising for the next couple of years, stating: ‘Part of the reason the oil price has risen so much recently is that those extra sources of supply haven’t come on stream as rapidly as one would hope. So it is perfectly reasonable to expect that if the demand for oil continues to rise in the way that it has done over the last few years, that the oil price may continue to rise over the next year or two.’
Households have been facing financial pressure and misery for some time, and rising inflation is likely to make the matter worse. Household finances have already been hit by rising food bills, higher energy bills, and soaring living costs.
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