Outlook for UK Households, the Devolved Nations and the English Regions

We project that nearly 1 in 5 households will have little or no savings by April 2024: faced with the triple shock of soaring energy, food and mortgage rates/rental costs, nearly six million households will see their savings fall to negligible levels despite the Energy Price Guarantee (EPG) and other support measures. Our policy proposal for a variable price cap (where the price per unit of energy used rises with usage) provides targeted assistance to vulnerable households: whereas the EPG represents a general price subsidy that is expensive, subsidises top earners and does not incentivise energy saving, a variable price cap is fiscally more efficient, socially more just and ecologically more responsible. Mortgage repayments on a variable rate will increase by at least 50 per cent on average when interest rates hit their projected peak of 4.75 per cent: together with projected rent increases, this may push an additional 250,000 households into extreme poverty. We propose a £2bn Housing Support Fund administered at local authority level to help with fast-rising housing costs. More than 2.5 million people will turn to food banks over the winter months: spiralling food prices hit the poorest hardest; government needs to raise benefits in line with inflation to prevent a further increase in destitution, which already affects about 1.2 million people; government should also introduce a Universal Credit uplift of £25 per week for twelve months at a total cost of £2.7bn. Anticipated cuts to capital investment will worsen the prospects for levelling up: government should use the Autumn Statement on 17 November to maintain capital spending outside London and the South East and work with business to unlock private investment (Chadha, 2022). Devolving decision-making and spending powers is key to a sustained regional regeneration strategy, particularly in policy areas such as skills, housing and R&D; the three devolved nations and the English regions require stability and greater resource and power to address some of the root causes of regional inequalities (Pabst, 2021; McCann, 2022).