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The cost of living has risen to an all time high since July 1992. Global fuel and food prices have rocketed, pushing inflation up 3.3%, said Bank of England governor Mervyn King.
Inflation could rise above 4% later this year, he warned – more than double the governments target.
City Economists state, an expected interest rate cut now looks a long way off, spelling continued misery for homeowners.
In response chancellor Alistair Darling called for a curb on wage increases in the public and private sectors, saying it would only undermine peoples living standards.
Blame for the gloomy outlook was laid at Gordon Browns door by shadow chancellor, George Osborne. ‘His years of boom and borrowing have left Britain ill-prepared to face the double evil of rising inflation and falling growth.’ He said.
The situation is reminiscent of the 1970’s, said Liberal Democrat spokesman Vince Cable, with unemployment and inflation rising as growth fell.
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