Inflation crisis may cause recession, economists warn

Confidence among shoppers has fallen to its lowest level since the 2008 financial crash as the soaring cost of living prompted a sharp drop-off in spending, new figures show. The disastrous economic data led analysts to warn that the crisis is at risk of turning into a full-blown recession with prices rising and shoppers tightening their belts.

- BEN CHAPMAN

 

Struggling households cut back spending on online purchases, food and fuel, analysis found, while Rishi Sunak was told the public hasn’t been given the help they need. And economists are warning that much worse is likely to come, with the impact of huge increases to energy bills and rises in tax and national insurance yet to hit.

Offiial figures released yesterday showed retail sales fell 1.4 percent in March, faster than February’s 0.5 percent drop. Online spending was down 7.9 percent as the lifting of Covid restrictions saw people return to buying in stores. Fuel sales tumbled 3.8 percent as record petrol and diesel prices caused motorists to cut back on non-essential journeys.