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Cost of living squeeze to continue for 'two years'

Cost of living squeeze to continue for 'two years'
A customer shops for food items at a fruit and vegetable stall at a market in Walthamstow, east London on February 4, 2022. The UK government on Thursday stepped in to help the hardest-hit households struggling with the rising cost of living, announcing a £9 billion package to offset soaring energy bills. (Photo by Tolga Akmen / AFP) via Getty Images)
AFP via Getty Images

The current cost-of-living squeeze affecting Britons will continue for two years, the governor of the Bank of England has warned recently.

Andrew Bailey said inflation was not expected to return to normal levels until early 2024, with pay rise struggling to keep up.


“It is going to be a difficult period ahead, I readily admit, because we all get what we are already seeing and we’re going to see a reduction in real income,” Bailey told BBC Radio’s Today programme.

“Based on what we see today, I would expect that, so we’re going to start coming out of it in 2023, and two years from now we expect we’ll be back on to a more stable – certainly inflation – back to a more stable position.”

The Bank forecasts that inflation will hit 7.25 per cent in April.

With workers’ pay rises averaging below 5 per cent and taxes set to rise in April too, it means households here face the biggest fall in their real incomes since comparable records began 30 years ago.

Bailey reiterated his assertion that workers should show “restraint” when asking for salary increases.

The governor encouraged companies not to give staff big pay rises, warning it could lead to a spiral of higher prices being followed by higher wages, pushing inflation higher.

“We think that some of the bottlenecks around the world that have been causing disruption to the supply of goods and have been pushing prices up are starting to ease,” he said.

“We think there are good reasons to believe energy prices will start to ease, not least because they are somewhat seasonal. There are risks on both sides of that. It’s possible that energy prices will come down more rapidly because they’re so elevated at the moment.”

The primary driver of inflation in the past year has been higher energy prices, caused by constrained supply at a time of surging demand as the world emerges from the worst of the pandemic.

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Independent retailers are demanding tougher police action, more bobbies on the beat and harsher punishments as shoplifting levels reach an all-time high, a new survey reveals.

A whopping ninety-one per cent of respondents to a survey conducted by the Federation of Independent Retailers (the Fed) called for more police patrols on streets, while a similar number - 90 per cent - said that shoplifters should be handed harsher sentences.

Seven out of 10 respondents (72 per cent) said their stores had experienced shoplifting, break ins and damage to property, while they and their staff had been physically or verbally threatened.

Just under half of respondents (47 per cent) said they and their employees had been threatened or had suffered abuse and violence when asking for proof of age ahead of selling an age-restricted product.

Forty-four per cent reported that they and their staff had faced abuse or violence because they had refused to make a proxy sale – selling an age restricted product to a customer buying for a minor.

The results of the Fed’s survey came as new figures from the Office of National Statistics revealed that shoplifting was at a record high, with almost half a million offences recorded last year.

According to the ONS, 469,788 offences were logged by forces in the year to June 2024 – a 29 per cent increase on the previous 12 months.

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“Inadequate responses from the police and a slap on the wrist for offenders means that shoplifting is soaring, and offenders are becoming more aggressive and brazen,” said Fed National President Mo Razzaq.

“From the responses we received, it is clear that real action is needed by police, by courts and by the government to stem the overwhelming tide of crime against retailers and their staff. Everyone deserves to feel safe at work and for their businesses to be protected against criminals.

“Fed members are also sending a clear message that one of the catalysts for verbal and physical abuse in stores is asking for proof of age before selling an age restricted product. If the government presses ahead with its plans to phase out smoking and vaping through a progressive ban to gradually end the sale of tobacco products across the country, independent retailers will be subject to even greater levels of violence, abuse and theft.”

Calling for action from the government and not just words, Mr Razzaq continued: “Without effective deterrent, criminals and opportunistic members of the public will continue to commit crimes.”

According to Ministry of Justice statistics, during the year to March 2024, 431 fines were handed out for retail theft under £100, while Home Office statistics for the same period show that 2,252 cautions were accepted for shoplifting.