Treasury suspended financial support during cost of living crisis – ‘Nothing in the bank’ | United Kingdom | New

Whitehall sources said the money people didn’t spend while cooped up at home during the pandemic was cited in talks between Chancellor Rishi Sunak and his team as a key reason for limiting the additional government funding. A Whitehall source revealed: “His team does not understand how serious the situation is for those on the lowest incomes.

“They have nothing in the bank.”

According to The Independent’s report, the move was condemned by senior officials involved in the talks for ignoring poorer households with no savings and those who had spent whatever they could have saved.

Inflation has hit new 30-year highs in recent months and is expected to rise further with an increase in the energy price cap this fall.

The cocktail of rising prices pushed a closely watched consumer confidence index compiled by market research firm GfK to -38 in April – the lowest level since 2008, during the Great Financial Crisis.

Unusual savings habits during pandemic shutdowns have informed Treasury thinking, sources said.

Those with higher incomes were able to accumulate savings as their spending on social activities, travel and clothing decreased.

In 2020, this effect has pushed household savings to levels not seen since records began in 1963.

Another insider told the publication that the approach underestimated the scale of the cost of living crisis, which produced the worst squeeze in real income since 1945 and failed to address high inequality. between rich households and their poorer, income-dependent counterparts.

They said this was ‘particularly evident for jobless and benefit-receiving households’, adding: ‘The impact in real terms on these households is, and will prove, quite devastating’.

READ MORE: Police rush to tape down neighboring semi-detached houses

Comments are closed.