Resolution Foundation says higher energy prices could leave UK households £480 worse off this year
The Facts
- The Resolution Foundation said a typical UK working-age household could be £480 worse off this financial year because of higher energy prices linked to the conflict involving Iran.
- The think tank said households had previously been on track for 0.9% income growth this year, but are now projected to see incomes fall by 0.6%.
- The Resolution Foundation said the hit to households would come from both higher petrol prices and higher household gas and electricity costs.
- Multiple reports say the Resolution Foundation published its analysis after oil and gas prices rose during the conflict, and said the effects would persist even after a recent ceasefire.
- The Resolution Foundation said lower-income households are still expected to see some income growth, but less than previously forecast.
- For the poorest fifth of households, the think tank's forecast for income growth was reduced from 2.8% to 1.2%.
Context
Why does the report say households will be worse off?
The Resolution Foundation said rising oil and gas prices are pushing up costs at the petrol pump and for household energy, which reduces real household incomes this year Guardian,Yahoo! Finance,Mirror.
Does the report say all households are affected in the same way?
No. The think tank said the squeeze runs across the income distribution, but lower-income households are still expected to see some income growth because of higher real benefit levels, while middle-income households are among those projected to move into negative income growth Yahoo! Finance,Evening Standard,Yahoo.
Did the recent ceasefire remove the expected impact?
Not according to the reports on the analysis. Several outlets said the Resolution Foundation's forecast still showed a hit to household finances even after the recent ceasefire, because energy prices remained above pre-conflict levels Independent,Financial Times News,National.
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