The Chancellor has taken a pounding in the Commons over Britains credit downgrade.
But it it is the hard working and disabled who could face a bruising as a result of the UK losing its top notch AAA rating (exceptional degree of credit worthiness) over the weekend.
Experts predict the pound will slide against the US dollar and the euro as global markets lose confidence in George Osborne’s recovery drive. This will push up the price of importing everything from food to petrol – as well as the cost of holidays.
Samuel Tombs, UK economist at City Research Specialist Capital Economics said:
“So far this year Sterling has fallen by six to seven percent globally. Even assuming the pound stays where it is now, households will on average be worse of by about £150 a year.
Inflation has already been tipped to peak at three percent this year – double the average wage rise and certainly affecting those on benefits.
Capital Economics fear the lower Pound could add 0.8 per cent to the Consumer Price Index (CPI) on it’s own.
They claim petrol could be three percent higher in the coming months – as fuel is traded in dollars. Food prices could be one percent higher. Other goods such as toys and washing machines may rise by an additional two percent.
The Centre for Economics and Business Research (CEBR) was already forcasting a squeeze on low income households of £208 this year because of the rising cost of living.
The CEBR economist CharlesDavis admitted:
“The decline could be even larger. We hadn’t assumed a large depreciation in Sterling during the year”.
Britains downgrade by credit rating agency Moody’s late on Friday follows similar downgrades to the US and France.
It is a big concern for Britain because the Government are still borrowing £110Billion a year to meet spending commitments.
This goes to show we are sliding out of financial stability and the people and familes who will suffer most are those dependent and deservedly requiring help from the government – genuinely disabled people, the elderly and poor families.
More doom and gloom – more stress and worry especially those being affected by the Governments welfare refoms.