What will Rishi Sunak do about the cost of living crisis?

theguardian.com:

The pressure is growing for Rishi Sunak – the question is when will he crack? After the Bank of England warned the economy was heading for a recession caused by the cost of living crisis, with inflation set to top 10% by the autumn, demands on the chancellor for a fresh package of emergency support for struggling families have reached a crescendo.

Threadneedle Street forecasts the second-biggest income squeeze since modern records began in 1964, with inflation racing to the highest level since the 1980s.

So far, Sunak has shown reluctance to act. Despite the bleak outlook, the view from No 11 is that time is on the government’s side for two key reasons.

First, lower energy use over the summer could take some of the sting out of last month’s record 54% rise in the Ofgem price cap. The current limit applies until October, buying him some time. Treasury sources said Sunak is keen to wait and see how volatile wholesale prices progress between now and August when the energy regulator announces its next cap period from October.

Second, the chancellor is keen to talk up the current £22bn in support for this financial year, including in his spring statement and energy rebate package. All told, the Office for Budget Responsibility reckons half the blow to household finances is covered and a third of the overall hit to living standards.

However, the economic outlook is only getting worse. We are already halfway through Ofgem’s six-month monitoring period for wholesale energy prices used to inform the October price cap and the picture is clear. Gas prices may have fallen back in recent weeks but remain elevated. The Bank expects bills to go up by 40% to about £2,800. On top of the April rise that is an eye-watering hit for families with