Rates and the Economy news in 2022
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- December 2022
NIESR projects peak Bank Rate effects on mortgage holders
The National Institute of Economic and Social Research projects that nearly four million UK households will face higher monthly mortgage repayments, typically around £400 more, once Bank Rate peaks.
- November 2022
Autumn Statement 2022 delivered by Jeremy Hunt
Jeremy Hunt's Autumn Statement of 17 November 2022 raised taxes, cut energy bill support from April and uprated benefits by 10.1 per cent, with the Resolution Foundation warning of a 7.1 per cent fall in household incomes.
Autumn Statement sets benefits uprating at 10.1% and raises benefit cap
The Autumn Statement uprated most benefits by September's 10.1% CPI from April 2023, raised the benefit cap for the first time since 2016 and extended cost of living payments and energy support.
Energy Price Guarantee to become less generous from April 2023
The Energy Price Guarantee will be scaled back from April 2023, with a typical household bill rising to £3,000, the Resolution Foundation says in its analysis of Jeremy Hunt's Autumn Statement.
Autumn Statement freezes income tax thresholds and lowers top rate threshold
The November 2022 Autumn Statement froze personal income tax thresholds, lowered the top rate threshold, announced a means tested £900 cost-of-living payment and committed to the pensions triple lock.
Chancellor announced cost of living support package
Jeremy Hunt's 2022 Autumn Statement introduced a package of cost of living support, including three payments worth £900 for means-tested benefit claimants and extra help for pensioners and disabled people.
NIESR responds to the 2022 Autumn Statement
The National Institute of Economic and Social Research said the Chancellor should have given households more support, criticising £60 billion of fiscal tightening and a universal energy subsidy.
OBR forecasts record fall in living standards for 2022-23
The Office for Budget Responsibility forecasts real household disposable income per person will fall 4.3 per cent in 2022-23, the largest drop since records began in 1956-57, followed by a 2.8 per cent fall in 2023-24.
Revised Energy Price Guarantee set at £3,000 from April 2023
The Energy Price Guarantee will expire in April 2023 and be replaced by a revised guarantee set at £3,000 for the average household, running until April 2024.
- October 2022
Chancellor statement sets end date for energy support schemes
The Energy Price Guarantee, the Energy Bills Support Scheme and the Energy Bill Relief Scheme are due to end in their current form on 31 March 2023, Consumer Scotland has said after the Chancellor's statement.
JRF analysis shows constituencies affected by possible benefit uprating cut
The Joseph Rowntree Foundation has published constituency analysis showing which areas would be most affected if the Government does not uprate means tested benefits such as Universal Credit in line with inflation.
Energy Price Guarantee to end in April 2023, 18 months earlier than planned
The Chancellor has said the Energy Price Guarantee will end in April 2023, 18 months earlier than planned, a move the Resolution Foundation says could save the Treasury up to £40 billion next year.
Energy Price Guarantee introduced capping typical bills at £2,500 a year
The Energy Price Guarantee took effect on 1 October 2022, capping typical household energy consumption at £2,500 a year after the then Prime Minister announced it on 8 September 2022.
Further price cap rise to around £2,500 expected in October 2022
The Resolution Foundation says commodity market prices point to the October 2022 energy price cap reaching around £2,500, which would put 7.5 million English families in fuel stress.
Government considering uprating some working-age benefits by earnings rather than inflation for April 2023
The Resolution Foundation reports the Government is considering raising some working-age benefits by average earnings of 5.5 per cent rather than September CPI inflation of around 10.1 per cent next April.
Government energy bills support scheme launched at the beginning of October 2022
The government energy bills support scheme began in October 2022, and StepChange recorded a 34% rise in visits to its page on government help with gas and electricity bills between September and October.
NIESR underlying inflation measure hits new series high
The National Institute of Economic and Social Research said its measure of underlying inflation, which strips out the largest and smallest price changes, reached a new series high of 8.8 per cent in October 2022.
- September 2022
Mini-budget triggers sharp fall in the pound
The pound fell sharply after Kwasi Kwarteng's mini-budget on 23 September 2022, with lenders pulling hundreds of mortgage deals and the Bank of England intervening to buy government bonds.
BEIS announces £100 alternative fuels payment and EBSS extension
The UK government set out further detail on the Energy Price Guarantee on 21 September 2022, including a £100 payment for some off-gas-grid households and an extension of the £400 Energy Bills Support Scheme discount.
Chancellor brings forward £45 billion package of tax cuts in first fiscal statement
The Chancellor has brought forward a £45 billion package of tax cuts, described as the biggest for 50 years, with gains concentrated among higher earners and in London and the South East.
Emergency Budget Review published
The Scottish Government published an emergency budget review in September 2022 after high inflation eroded the value of the Scottish Budget, with the Finance Minister estimating it was worth around £1.7 billion less than in December 2021.
Government announces Energy Price Guarantee intervention in the energy market
The government's Energy Price Guarantee, announced in late August 2022, will substantially reduce the inflation shock facing households this winter, though private renters still face sharply rising rents.
UK inflation reached 10.1%, the highest since 1982
UK inflation reached 10.1% in September 2022, the highest since 1982, a Scottish Government report said, setting out almost £3 billion of devolved cost of living measures.
Liz Truss announces Energy Price Guarantee capping typical household energy bills at £2,500 for two years
Liz Truss announced an Energy Price Guarantee on her second full day as prime minister, capping typical household energy bills at £2,500 for two years.
September 2022 fiscal event drove market reactions and a spike in mortgage rates
The September 2022 fiscal event pushed consumer confidence to its lowest recorded level and spiked mortgage rates, before most of the announced measures were rapidly unwound.
- August 2022
JRF estimates total cost of living increase of £2,550 between 2021/22 and 2022/23
The Joseph Rowntree Foundation estimates household costs will rise by £2,550 between 2021/22 and 2022/23, with energy accounting for £1,550 of that total and non-energy costs £1,000.
- May 2022
Visits to Government energy bill help page rose 54% between April and May 2022
StepChange reports visits to its page on Government help with energy bills rose 54 per cent between April and May 2022, which it suggests may be an early sign of the energy price cap rise.
- April 2022
State Pension uprated by 3.1% under suspended triple lock
The State Pension rose by 3.1% on 6 April 2022 after the earnings element of the triple lock was suspended for a year, giving pensioners an annual boost of up to £289.
Benefits uprated by 3.1% while inflation stood at 9%
Most working-age benefits and the State Pension rose by 3.1 per cent in April 2022, based on September 2021 inflation, while the cost of living was already rising far faster.
CPI inflation reaches 40-year high
UK consumer price inflation reached 9% in April 2022, a 40-year high driven by energy bills and food prices, according to a Scottish Parliament committee report published in July 2022.
UK Government announced energy support package for almost all GB households
The UK government announced a support package in April 2022 for almost all households in Great Britain, including the £400 Energy Bills Support Scheme and a guarantee capping the unit price for a typical bill.
National Insurance rates rise and Income Tax thresholds frozen
National Insurance rates rose and Income Tax thresholds were frozen in April 2022, with the Resolution Foundation saying higher inflation makes the threshold freeze a bigger tax rise than planned.
National Minimum Wage and National Living Wage rates rise
The National Living Wage rose to £9.50 an hour on 1 April 2022, with new statutory minimum rates for all age groups and apprentices, benefiting around 2.5 million UK workers.
- March 2022
NIESR publishes February 2022 inflation analysis showing underlying inflation above 5 per cent
NIESR reports UK headline consumer price inflation of 6.2 per cent for February 2022 and underlying inflation of 5.1 per cent, and forecasts inflation will average 7 per cent over 2022.
Report projects worst parliament on record for income growth
The Resolution Foundation projects that 2019-20 to 2024-25 will be the worst parliament on record for income growth, with the median falling 2 per cent as inflation outpaces pay and benefits.
Chancellor announces £3,000 increase in NICs threshold in Spring Statement
The Chancellor raised the National Insurance threshold by £3,000 to £12,570 in the Spring Statement, a change worth £330 to most workers but far less to those on means-tested benefits.
UK headline CPI inflation rises to 7.0 per cent
UK headline consumer price inflation rose to 7.0 per cent in March 2022 from 6.2 per cent in February, the National Institute of Economic and Social Research said.
OBR forecasts largest fall in living standards since records began for 2022-23
The Office for Budget Responsibility forecasts real household disposable income per person will fall 2.2 per cent in 2022-23, the largest drop in any single financial year since ONS records began in 1956-57.
Spring Statement announces £17.6 billion of household support
The Office for Budget Responsibility said the Spring Statement's £17.6 billion of household support would not prevent the largest fall in living standards in any single financial year since records began in 1956-57.
- February 2022
Russia launches full-scale invasion of Ukraine, energy prices spike
Russia's full-scale invasion of Ukraine on 24 February 2022 pushed already rising wholesale gas and electricity prices to record highs, setting up the largest domestic energy bill increases in Great Britain since the energy crisis began.
Ofgem energy price cap announcement means bills likely to rise
Ofgem's energy price cap announcement means household electricity and heating bills are likely to rise by an average of £693 a year, prompting a package of support measures from the Chancellor.
Committee takes evidence on the cost of living crisis
The Work and Pensions Committee first took evidence on the cost of living crisis in February 2022, when inflation was forecast to peak at 7.25% in April 2022, and published its findings that July.
Invasion of Ukraine caused energy prices and inflation to skyrocket
Russia's invasion of Ukraine in February 2022 pushed up oil and gas prices, drove UK inflation to double digits and triggered a wave of government support for household energy bills.