A leading charity has warned that some families will be forced to choose to either starve or freeze this winter and “radical action” is urgently needed.
The Bank of England warned on Thursday that in October the Consumer Price Index could hit a whopping 13.3% which is the highest for over 42 years.
Interest rates were also raised from 1.25% to 1.75% which is the highest rate since January 2009.
Ofgem has also announced today that the energy price cap will rise every quarter instead of every six months which will “create unnecessary uncertainty for households” as struggling households will “likely see their bills rise even faster.”
The regulator said this will go “some way to provide the stability needed in the energy market,” adding, “It is not in anyone’s interests for more suppliers to fail and exit the market.”
Derek Mitchell – the chief executive of Citizens Advice Scotland has called for “radical action” from government amid “soaring inflation.”
He warned, “Soaring inflation means higher prices in the shops and costs on bills for people already struggling badly with the cost-of-living crisis.
“That inflation is expected to stay high for much of 2023 and the looming prospect of a recession means this crisis isn’t going anywhere, risking a legacy of debt, poverty and destitution for years and years to come.
“Some of the most vulnerable people across the UK this winter will face a choice between freezing and starving.
“That’s the reality and we should not pretend otherwise. People are likely to die this winter because of this crisis unless we see urgent and radical action from policymakers.”
Small businesses could close as they are already “grappling with paying of debts” which they incurred during the pandemic.
The Scottish Licensed Trade Association warned, “The last thing businesses need just now is for the Bank of England to increase the interest rate to its highest level since December 2008,” said managing director Colin Wilkinson.
“Businesses have been feeling the squeeze since the pandemic hit two-and-a-half years ago and are already grappling with paying off debts incurred during Covid.
“This could be the final straw.”