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The U.K. Is Two Months Away From a Brutal Cost-of-Living Crisis

Jan. 20, 2022, 5:01 AM

Soaring energy prices and rising inflation are causing policy headaches around the world. In the U.K., though, the government is raising taxes at the same time, kicking off an economic experiment in one of the countries worst-hit by the pandemic.

Britain’s acute cost-of-living crunch will hit in April, instantly stretching household and company budgets and penalizing the poorest households, many of which have already been most impacted by Covid-19.

The squeeze is coming from all sides. U.K. consumer price growth hit a 30-year high of 5.4% in December, and is wiping out wage gains. The Bank of England is jacking up interest rates faster than the Federal Reserve. A cap on domestic ...

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