Families are £2,900 worse off after five years of inflation shocks, with energy bills set to rise AGAIN

From the Newshound archive · first published 8 October 2026.

British families have lost nearly £3,000 in real income over five years as three successive crises — Covid, Ukraine and the Middle East war — drove the equivalent of 13 years of normal inflation, a Resolution Foundation study reveals. The hardest hit have been the poorest households: roughly 1.7 million families could not heat their homes adequately in 2022/23, and the share of low-income households in arrears on rent, water and energy bills has nearly doubled since 2020 to 18 per cent. Five-year mortgage deals have now topped 6 per cent for the first time in three years, and energy bills are forecast to climb a further 16 per cent this January.

Energy costs have been at the 'epicentre' of the crisis, feeding food inflation that peaked at nearly 20 per cent in March 2023.

Resolution Foundation chief economist James Smith warned that help is needed 'just when the public finances leave less room than ever to provide it'.

Chancellor John Healey faces pressure to act in his first Budget, but rising tensions with Iran and a worldwide bond market sell-off are already pushing borrowing costs higher.