The economics expert noted the fall the UK is now expected to experience will be the sharpest since records began in 1990. The Sky News’s correspondent noted the Bank of England conceded the fall, coupled with the decision to increase interest rates, will leave many families facing “more pain” as the cost of living crisis wreaks havoc among lower-income households. Mr Conway said: “You’re seeing the biggest fall in disposable income – talking about post-tax labour income – that we’ve ever seen as far back as the records go.
“They started in 1990, they’re falling those labour disposable incomes.
“They’re falling by 2 percent this year, according to the BoE’s forecast, we’ve never seen anything like that.
‘And it just underlines what a cost of living crisis we’re facing at the moment.”
He added: “The Bank talking about that, talking about inflation, but saying that the risk of higher inflation is so big that even though this is going to cause more pain for families, particularly those on floating rate mortgages, they’re deciding to raise interest rates.”
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In their announcement, the Bank also cautioned that rocketing energy prices will drive inflation to an eye-watering 7.25 percent in April, which is the highest level since August 1991.
The Bank’s Monetary Policy Committee (MPC) voted 5-4 to raise rates from 0.25 percent to 0.5 percent – the first back-to-back rise since 2004, coming after a quarter-point increase at its last meeting in December.
Four of the nine members called for a steeper rate increase to 0.75 percent to help put the brakes on rampant inflation.
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