An already bleak economic picture worsened yesterday with the Bank of England hiking interest rates and predicting an even gloomier outlook for the months ahead.
The bank raised interest rates from 0.75 to 1 per cent, the highest level since 2009 and a blow to those with variable rate mortgages.
While this increase had been anticipated, it is the warnings on the state of the economy that will cause wider alarm.
In a grim set of forecasts, the bank predicts the economy will contract in the final three months of 2022 as households cut back on their spending.
It is also predicting that inflation will soar from the current 7 per cent to more than 10 per cent in October, the highest level for forty years.
Rampant inflation will see household disposable income plunge by 1.75 per cent this year while overall real income will tumble by an unprecedented 3.25 per cent this year and fall again in 2023.
The bank has also indicated that further interest rate increases will likely be needed to cool soaring inflation.
This is incredibly difficult news for households and businesses already struggling with a series of economic shocks, as soaring energy, food and fuel costs cause acute financial pain.
The prospect of inflation sky-rocketing to 10.25 per cent later this year is profoundly worrying as incomes are squeezed further and families fear even higher bills in the autumn and winter.
The war in Ukraine is being blamed in large part for the hike in gas and electricity prices but even before the invasion people were facing a cost of living crisis.
Unfortunately, the response of the British government to this crisis has been wholly inadequate.
Chancellor Rishi Sunak's spring statement failed to properly address the mounting pressure on incomes while Boris Johnson had little to offer when questioned about the plight of cash-strapped citizens this week.
However, it is clear this crisis is not going to ease any time soon and if anything will become much worse as the year progresses.
People in Northern Ireland need a Stormont Executive to look at all available measures to alleviate the desperate situation facing many families.
But it is incumbent on the British government to take the sort of far-reaching action that can make a real difference to those hit hardest by soaring costs.
