Back to the bad old days of the 1990s as recession looms for UK

theguardian.com:

Britain’s hard-pressed households could feel even worse done by this week when official inflation figures show just how fast the cost of living is rising. Economists are forecasting a jump from March’s 7% to 9.1% in April.

If the pundits are right, the consumer prices index will be at its highest level since 1990, when the UK was struggling with one of its worst postwar property slumps and a full-blown recession.

Not that families need telling – disposable incomes across the country have been hit hard. The price of unleaded petrol may have steadied at between £1.60 and £1.70 in the past month, but energy bills and food prices are soaring across the board.

James Knightley and James Smith, economists at ING, said the month-on-month rise would reflect a 54% jump in household gas and electricity bills since the beginning of April, following regulator Ofgem’s lifting of energy price cap.

The Bank of England, citing rising energy costs, has forecast a rise in inflation to above 10% after the summer. “We are less sure that it will get as bad as that, but then again inflation has consistently surprised to the upside,” it said in a statement.

Data on the jobs market will be published on Tuesday, a day before the inflation figures.

Central bank officials are most worried by increases in wages over the past few months of about 5.4%, and the extent to which workers will demand increases in their monthly earnings to keep pace with rising inflation over the next year. This is the much-feared precursor to a wage/price spiral that could push inflation higher for years to come.

Some members of the Bank’s monetary policy committee (MPC) believe wage demands could rocket – and that employers will be forced to push up prices to recoup the higher