Rising bills and shrinking pay packets are among the factors which will make 2023 a “groundhog year” for families, a think tank has warned.
Coming on the back of an average £800 fall in each household’s real disposable incomes in 2022, 2023 will see another similar drop thanks to a £900 rise in energy bills and £700 tax rise for the average household – only slightly mitigated by increases in benefits and minimum wage.
“2023 should see the back of double-digit inflation, but it also looks set to be a groundhog year for family finances: things will get far worse before they start to get better,” wrote Torsten Bell, chief executive of the Resolution Foundation.
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Around two million households will see their mortgages increase, with an average hit of £3,000 a year for a fixed-rate mortgage.
However, inflation is set to fall from record double-digit levels seen in 2022. That doesn’t mean it’s not rising – as long as it is positive, prices are still rising.