Consumers have begun cutting back on food spending and reduced their use of gas and electricity at home, as more people report rising living costs and concern grows about the impact of soaring prices on the poorest households in Britain. According to an extensive survey of more than 13,000 adults in Great Britain, the Office for National Statistics (ONS) said as many as 83% saw an increase in their cost of living this month, up from 62% in November. As utility bills and the weekly shop became more expensive, the ONS said 34% of those reporting rising living costs said they were using less gas and electricity at home, while 31% said they were spending less on food. Half have cut back on non-essentials. The ONS figures raise concerns that some of the poorest in Britain are being forced to make tough choices between heating and eating. They underline comments on Wednesday from the Bank of England’s deputy governor Ben Broadbent that Russia’s invasion of Ukraine was causing the biggest-ever external hit to Britain’s economy. “From an economic perspective, coming on top of what was already a very steep rise in the cost of globally traded goods, in the wake of the pandemic, the invasion has led to substantial rises in the cost of energy and other commodities. “As a big net importer of manufacturers and commodities, it’s doubtful that the UK has ever experienced an external hit to real national income on this scale,” he said. Household gas and electricity bills are expected to rise by 54% from Friday, with charities warning of a sharp rise in poverty levels without further government support for the poorest families. Average band D council tax bills in England are also expected to go up by £67 on Friday to almost £2,000 a year. The UK’s annual inflation rate reached 6.2% in February – the highest in three decades – amid soaring energy costs, rising prices for food and drink and record petrol prices. With the planned increase in household energy prices from April, the Bank of England expects inflation to hit 8% this spring and has warned it could rise close to 10% later this year. Official forecasts show Britain is on track this year for the biggest annual hit to living standards since modern records began in 1956. Highlighting the risk to hard-pressed families, the ONS said as many as 29% of adults could not afford an unexpected but necessary expense of £850. Those on the lowest incomes, renters and those with no formal qualifications were the most likely to be unable to afford such an unexpected expense. Parents of dependent children, those who are divorced or separated, disabled adults and those living outside of London and the south of England were also less likely to manage. The government has announced a £9bn support package of council tax discounts and loans, although the chancellor, Rishi Sunak, faced criticism at his spring statement last week for prioritising tax cuts over increasing the value of universal credit benefits despite heavy pressure to do more to help low-income households. Frances O’Grady, the general secretary of the TUC, said the government urgently needed to provide more support. “With energy bills set to shoot up by £700 next month, and by hundreds more in the autumn, many households face being pushed into the red. “Ministers must do far more to help people get through this cost of living crisis. The support announced so far by the chancellor has been little more than thin gruel.”
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