Friday, August 5, 2022

Energy bills are incomprehensible now – people can’t afford £500 a month

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There is a bleak outlook on the horizon with rising energy bills hitting the poorest families hardest and a recession is also predicted

The Bank of England raised interest rates to 1.75 per cent – the first rise of 50 basis points since 1995 – and added a somber warning that it expects the country to be in recession by the end of this year will be located.

We’ve known for a while, but this week has highlighted just how difficult the coming months will be for households across the country.

It has long been predicted that this could happen, but it still packs a punch and further proof that the UK economy is in utter distress.

Although well publicized along with rising energy costs, soaring food prices and record high fuel bills, for some it has only taken this week for the reality to set in.

I spoke to a colleague on Thursday and we talked about how the numbers being pumped out seem a bit meaningless now because they are so ridiculously high.

We’re so used to bad news – and ever-higher creeping costs – that energy bills reaching £3,600 by this winter seem out of reach.

It’s so ridiculously high that it seems incomprehensible that it’s real.

But it is. And it means many of us could be paying £300 a month on our energy bills in January.

Breaking the projected costs down into monthly payments, it’s hard to imagine how anyone — except for the very wealthy — could afford that without falling into debt.

The numbers are so outlandish that it is hard to imagine how much money is actually debited from the bank account.

Not only will it take many years to recover from such a financial shock, some may not even survive it.

While this may have sounded dramatic at one point, it’s now all too easy to imagine how the combination of soaring energy bills, soaring food bills, combined with a recession, could be devastating to life.

Although the government has taken some action, a one-off £400 energy grant compared to a £300 monthly bill won’t go very far.

In times like these, I think of the poorest and most vulnerable in society. How will they get through this?

Food banks are already strained to the breaking point, with The Trussell Trust reporting a 50 per cent increase compared to pre-pandemic levels and a 29 per cent increase year-on-year, and I heard from a mother who is faced with the choice of charging her power chair or feeding her children due to rising costs.

Bank of England Governor Andrew Bailey acknowledged that the poorest are hit hardest by rising interest rates.

The added pressure of a recession means some people could lose their jobs, while the gap between the richest and poorest is likely to widen.

Those on welfare and those on a fixed income are hitting the hardest, experts say, while the poor are likely to get even poorer.

It’s all in all a bleak outlook – to say the least – with no signs of things improving recently.

I’m not sure what the solution is – but I do know that by the end of this year, if more aid isn’t provided, many more people will be suffering – and soon.

Do you have a consumer concern, problem or complaint? Contact: grace.gausden@inews.co.uk

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