![]() ![]() The UK currently has higher inflation than any other country in the G7 and is expected to see its interest rates peak higher than other major economies. The majority of investors now expect another 0.5 percentage point rise at the start of August. The latest analysis follows the Bank of England's decision to raise the base interest rate last week to 5% - the highest level since 2008.Įconomists had expected the Monetary Policy Committee to raise interest rates by only a quarter percentage point, but the MPC voted 7-2 for the surprise increase, explaining that it was aiming to bring higher-than-expected inflation under control and indicating concern about high wage increases and company profit margins. Last week, the peak forecast was 6% - a few months ago it was only 4.5%. They note a downturn was the price of "taming an inflation rate that remains stubbornly close to double digits".Īnalysts have also said that money markets are almost fully pricing in the Bank of England raising rates to 6.25% by December and that could see the UK economy hit a "far worse slump". The UK will be pushed into a recession by the end of the year, according to analysts at Bloomberg Economics.Įxperts at the news agency said the Bank of England - which last week shocked investors by raising interest rates half a percentage point to 5% - will tip the country into a year-long recession starting in the fourth quarter of this year. If you are not sure whether you should be receiving benefits you can use Money Saving Expert's benefits checker here. Not sure if you are able to receive benefits? Have two or more children? The maximum level of support will rise from £1,108 to £1,630 a month.If you have one child the maximum amount you will be able to claim back will rise from £646 to £951 a month.However, it is important to note that you may not be able to get the new amounts immediately as this depends on when your Universal Credit assessment period ends.įrom tomorrow, parents will still only be able to claim up to 85% of their costs, but the caps will increase to the following: Parents on Universal Credit will soon be eligible to claim hundreds of pounds more in support as the government tries to get more people back into work.įrom 28 June, a change in government support funding will help those whose costs are greater than £760 a month for one child, and £1,304 a month for two or more children. He said the way to get rents down in the longer run was to build more properties. "About 40% of private renters are on housing benefit so you are talking about quite a large number of people all competing for a relatively small number of properties," he said. Speaking to Sky News on the latest findings, co-author of the IFS report Tom Waters said there have been "substantial increases" in rent across the board. Rising mortgage rates are also likely to feed through into the rents being asked as they push up landlords' costs. Its report said: "This means that the support available for private rents is steadily declining in real terms - something that is especially important at the moment as rents are rising very rapidly." Local housing allowance (LHA) rates - which govern the maximum amount of support for their rent that low-income private renters can get - have been frozen in cash terms since April 2020, the IFS noted. It defined rents as being affordable if they could potentially be completely covered by benefits. ![]() In its report, the IFS, whose research was funded by the Joseph Rowntree Foundation (JRF), said that on average, housing costs amounted to 11.4% of UK households' incomes. Only one in 20 (5%) newly listed private rental properties on Zoopla in the first quarter of 2023 were affordable for people receiving housing benefit or Universal Credit, according to the Institute for Fiscal Studies (IFS).
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