New BoE deputy governor warns on bleak year ahead

The new deputy governor of the Bank of England, Charlie Bean, has warned that UK households are facing a bleak twelve months ahead, with household finances already tight and the soaring cost of oil set to add to the financial woes of most households. He told Brits to prepare themselves for falling living standards over the coming twelve months.

Mr Bean stated that the UK was facing ‘the most challenging set of circumstances since at least the early 1990s and possibly earlier, with higher inflation the result of global factors’. He also warned: ‘As a nation, it means that our living standards will be lower than they would otherwise be.’

Bean went on to state: ‘Real living standards will have to grow less rapidly this year, and possibly part of next year, than was the case in the late 1990s and early 2000s. There is not very much that we can do about that as a nation unless we improve our productivity to offset it.’

It is not just consumers that are facing a bleak year but also businesses, and Bean predicted that soaring oil prices could continue for another two years, making the situation even worse. The state of the housing sector is also adding to business woes, and one official said: ‘Different sectors are suffering different pressures - the construction industry in particular and housing are under enormous pressure.’