Many factors contribute to the current cost of living crisis. Experts attribute the high energy, food and bill prices to higher tax rates after the pandemic, inflation reaching a 30-year high and Russia's ongoing invasion of Ukraine.
According to a monthly survey by YouGov and the Center for Economic and Business Research (Cebr), more people are worried about everyday spending today than a year ago.
Households were asked how they think their financial situation will change in the coming year. Questionnaires scored responses: anything above 100 is considered positive, while a number below 100 indicates a more negative opinion.
A year ago, that figure surpassed 100, but in recent months, as the cost of living crisis deepened, it fell from 59.7 to 49.1, the biggest drop in the past month.
“The ongoing cost of living and uncertainty caused by the ongoing conflict in Ukraine have again had a major impact on both consumer confidence and household finances,” said Emma McInnes, head of financial services at YouGov.
"For the second month in a row, declining household financial data — both retrospective and forecast — are at the lowest level since being tracked nearly 10 years ago."
In a spring statement last month, Chancellor Rishi Sunak responded to calls for him to soften the blow of the cost of living crisis by promising to raise the threshold for national insurance by £3,000 to £12,750 from July and lower basic tax rates to the lowest since 2024.
Earlier in February, he announced a cut in council taxes from £150 to £350.
But critics say the government's measures don't go far enough, as the Bank of England predicts inflation "will hit around 8 percent this spring" and "turn even higher later this year" before "picking up significantly" in the next years.
Kay Neufeld of Cebr said: “With inflation of 6.2 percent in February as measured by the CPI (Consumer Price Index), the cost of living crisis in the UK has settled well, explaining some of the concerns which are expressed by households who are looking at their financial situation.
"The limited measures announced by Chancellor Rishi Sunak in a spring statement have clearly not reassured most consumers."
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