UK households warned of ‘year of the squeeze’ as cost of living soars

Stalling wages and rising tax and energy bills could cause catastrophe without government intervention, thinktank warns

UK households face a hit of 1,200 next year as stalling wages and rising tax and energy bills cause a cost of living catastrophe" in the spring, a leading thinktank has warned.

Government measures, including the new social care levy on national insurance and the freezing of the personal income tax allowance, will combine with high inflation to make 2022 the year of the squeeze", the Resolution Foundation said.