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Brits to face two more years of soaring living costs, Bank of England warns

By Advertorial  |  Posted: February 12, 2013

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Brits are bracing themselves for further financial misery as a report due out mid-week is expected to warn of a further two years of rising inflation and sky-high living costs.

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In a report on Wednesday (13 February), Sir Mervyn King is expected to warn that despite forecasts by the Bank of England back in November that inflation would fall towards 2% in 2013, inflation is actually more likely to rise.

Inflation currently stands at 2.7% and has been above the 2% target since late 2009. Last week, the Bank admitted that inflation is “likely to rise in the near term and may remain above the 2% target for the next two years”.

This accompanies research by the Centre for Economics and Business Research (CEBR), which revealed last week that the cost of living in the UK is 11% higher than the international average, meaning that Brits are shelling out £2,000 a year more than our foreign counterparts.

It found that transport costs 31% more in Britain than overseas, and that energy and property costs are also pushing up the extortionate cost of living.

With an expected rise in inflation in the pipeline, it looks as though British families will see no respite from

the financial blows being dealt on a regular basis by the ailing UK economy.

Experts have also voiced concern about rising debt, following figures which revealed that the average household owed £3,200 on credit cards, overdrafts and loans between 2008 and 2010.

Stepchange Debt Charity said that the findings “paint a bleak picture of financial vulnerability in the UK.”

Experts believe the problem has worsened in recent years, with economist Howard Archer from IHS Global Insight saying: “It seems reasonable to suspect that household debt has risen further since 2008 to 2010.”

Delroy Corinaldi, external affairs director of StepChange, said: “Stagnating wages and rising living costs continue to push household budgets beyond breaking point, and the financial torture facing many households shows little sign of abating.”

If you are struggling to cover the cost of essential expenditure, compare personal loans with MoneyExpert.

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