LONDON, Aug. 21 (Xinhua) -- Lisa O'Neill scrutinizes her bank account to look for possible ways to economize, reviewing her income and outgoings, fearing her family may no longer be able to make ends meet with a staggering rise in energy bills just around the corner.
The working mom-of-four is preparing for a sweeping cost-of-living crisis in the UK.
"We have cancelled a private pension and are using the money we were paying on that to go towards our bills," said O'Neill, who lives just outside Liverpool, in a recent interview with Xinhua.
Instead of doing one big grocery shop in a large store, O'Neill has started bargain-hunting for cheaper purchases, and shopping in different stores.
"I know my colleagues are doing the same things," O'Neill told Xinhua. "They are reviewing their bank accounts, looking at the outgoings, trying to maximize the money that's coming in, and also trying to see where they can cut back.
"I don't think we've fully recovered (financially) from the COVID pandemic, and now the cost-of-living crisis is all everybody talks about."
The crisis has prompted O'Neill's family to put more thought into forward planning. "Our concerns are that we could be working just to pay our bills without anything else, and struggling with that as well."
Looking at the data, O'Neill and her colleagues have every reason to be worried. The latest figures published on Wednesday show that wide-ranging price spikes have driven up the country's inflation once again. The Consumer Prices Index (CPI) surged by 10.1 percent in the 12 months to July, the highest level in 40 years, according to the Office for National Statistics (ONS).
Inflation in Britain has hit successive new highs since the winter of 2021, but wage increases have failed to catch up. Real pay among employees in April to June this year fell at the fastest pace in more than two decades, ONS data showed on Tuesday.
While growth in regular pay excluding bonuses was 4.7 percent among employees in April to June 2022, it fell by 3.0 percent after taking inflation into account, said the ONS.
Another ONS survey in late July said three-quarters of adults in the UK have reported being very or somewhat worried about the rising cost of living in the past two weeks.
The worst is yet to come. Earlier this month, the Bank of England (BoE), the country's central bank, expected inflation to continue rising to 13 percent in the fourth quarter of this year, and to remain at very elevated levels throughout much of 2023.
"There is lots of evidence that the cost-of-living crisis is becoming more prolific and more serious. Obviously, we haven't yet hit winter, so the energy bill crisis is not as visible as it no doubt will be in a few months' time," Patrick Diamond, professor of public policy at Queen Mary University of London, told Xinhua.
In early August, the UK's energy regulator Ofgem confirmed the energy price cap will be updated quarterly rather than every six months, warning that "customers face a very challenging winter ahead."
A typical household is now predicted to pay the equivalent of 4,266 pounds (5,162 U.S. dollars) a year in the first three months of 2023, according to new forecasts for the energy price cap from the market research firm Cornwall Insight.
Pensioners and benefit claimants will be the hardest hit by the soaring energy costs, said Diamond.
He also underlined that two-parent households on middle to high incomes with children also face significant pressure because their discretionary budgets are not that large, and the huge increases in energy costs will eat into their family budgets.
Meanwhile, Dr Keith Baker from Glasgow Caledonian University predicted the current cost-of-living crisis will be the worst domestic crisis to hit the UK since the General Strike of 1926.
Baker, a research fellow in fuel poverty and energy policy, told Xinhua: "We started off with 8 million people in the UK going into fuel poverty, and it's now up to 12 million, and I think it's going to go way beyond that."
In the worst scenario, he said more than half of the British population would be drastically hit. "We are now into really quite scary, unknown territory."
