Inflation in the UK could reach a huge milestone next year.
According to US investment Bank Goldman Sachs it could hit 22 per cent next year if soaring gas prices fail to come down.
Goldman Sachs economists wrote in a research note on Monday: “In a scenario where gas prices remain elevated at current levels, we would expect the price cap to increase by over 80 per cent in January (vs 19 cent assumed in our baseline).
“(This) would imply headline inflation peaking at 22.4 per cent, well above our baseline forecast of 14.8 per cent.”
Energy costs
It seems unlikely that energy costs will come down as the proportion of new clients in energy arrears is growing, even before the “catastrophic” impacts of the October price cap hike are felt, a debt help charity has reported.
StepChange said one in five (20%) clients who completed full debt advice in July said the cost of living was their primary reason for contacting StepChange, up from 18% in June.
It also said that the proportion of new clients in gas arrears rose from 23% in June to 26% in July, while the proportion of those in electricity arrears was up from 28% in June to 30% in July.
Warm banks
More councils have signalled using churches, community centres and libraries as so-called ‘warm banks’ for people unable to afford to heat their homes this winter.
Birmingham, which is England’s biggest council serving 1.14 million people, has become the latest announcing measures either providing or sign-posting the hubs, by pledging to “map out spaces across the city where people can go to keep warm”.
Shetland Council: 96% of islanders could be pushed into fuel poverty
As many as 96% of people living in Shetland could be pushed into fuel poverty by next year, the local authority has warned.
Rising fuel prices are expected to impact across the country in the coming months, but the picture in one of Scotland’s islands is stark.
Shetland Islands Council say all but those earning £104,000 a year will be in fuel poverty, with average energy costs projected to rise to £10,300 per household annually by April – more than double the projection for the UK.
In predictions released on Monday, the council claims 96% of people will be spending 10% of their household income on energy by April, while 75% will be in extreme fuel poverty – meaning at least 20% of household income is spent on energy.
Related: More councils looking at ‘warm banks’ for residents amid rising energy bills