The savings of millions of people in Britain are set to be wiped out by the rising cost of living, a report has warned.
The UK is set to enter a recession which will hit millions of the most vulnerable households, especially in the worst-off parts of the country, the National Institute of Economic and Social Research (NIESR) said.
More than 2.5 million households will have their savings obliterated, it found, meaning that one in five UK households will have no savings by 2024.
The institute also said the number of households living from salary to salary would nearly double to 6.8 million, from 3.9 million, or 25 per cent of all UK households, in 2024.
The Bank of England is expected to raise interest rates by up to 0.5 percentage points this week in an attempt to bring inflation under control.
Gross domestic product is set to shrink in the third and fourth quarters of this year, and in the first three months of next year.
The report warned of a “three-quarter technical recession, but a relatively shallow one”.
However, it also said there was an “increased possibility of a deeper recession”.
The threat of stagflation, a nightmare of economists, has returned for the first time since the 1970s, the report said.
Stagflation is where an economy experiences slow growth, high unemployment and rising prices.
The economy is expected to grow this year, the NIESR said, but only by 3.5 per cent, before slowing to 0.5 per cent next year — far from an emphatic bounce-back from the pandemic.
The report found that inflation will peak around the last three months of this year.
Consumer price index inflation will reach close to 11 per cent, but will fall back to 3 per cent by the end of 2023. Inflation currently stands at 9.4 per cent.
“The UK economy is heading into a period of stagflation with high inflation and a recession hitting the economy simultaneously,” said Prof Stephen Millard, NIESR deputy director for macroeconomics.
He called on the Bank of England to try to bring inflation under control — interest rates of 3 per cent will probably be necessary for that — and for the new chancellor to support households hit by the recession and cost-of-living squeeze.
Prof Adrian Pabst, deputy director for public policy at NIESR, said: “All households are facing soaring energy and food bills but too many have to resort to credit, build up payment arrears or see their savings wiped out.
“The incoming administration needs to provide immediate emergency support to the 1.2 million hardest hit households and the one in five households that will become financially vulnerable as the energy price cap is lifted and the recession begins to bite.”
The report forecast that real incomes will be permanently lower, dropping 2.5 per cent in 2022 alone.
Real incomes will be 7 per cent below where they were headed before Covid by 2026, it said.
About 3 per cent to 5 per cent of this hit will come from Brexit while 1 per cent to 3 per cent will come from energy price rises and the remainder from government policy.
The report called for the government to increase universal credit payments by £25 a week for at least six months from October, which would cost about £1.4 billion, and also to increase energy bill relief payments from £400 to £600 for 11 million poor households, with the total costs amounting to £2.2bn.
The research shows that between the impact of inflation and the refusal of the government to raise benefits in line with inflation, the 10 per cent poorest households will be about 5 per cent worse off, despite the support they have been promised on energy bills.
It makes them the worst hit of any income group in society.
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Stamp duty timeline
December 2014: Former UK finance minister George Osbourne reforms stamp duty, replacing the slab system with a blended rate scheme, with the top rate increasing to 12 per cent from 10 per cent:
Up to £125,000 - 0%; £125,000 to £250,000 – 2%; £250,000 to £925,000 – 5%; £925,000 to £1.5m: 10%; Over £1.5m – 12%
April 2016: New 3% surcharge applied to any buy-to-let properties or additional homes purchased.
July 2020: Rishi Sunak unveils SDLT holiday, with no tax to pay on the first £500,000, with buyers saving up to £15,000.
March 2021: Mr Sunak decides the fate of SDLT holiday at his March 3 budget, with expectations he will extend the perk unti June.
April 2021: 2% SDLT surcharge added to property transactions made by overseas buyers.
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Starfield
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Water waste
In the UAE’s arid climate, small shrubs, bushes and flower beds usually require about six litres of water per square metre, daily. That increases to 12 litres per square metre a day for small trees, and 300 litres for palm trees.
Horticulturists suggest the best time for watering is before 8am or after 6pm, when water won't be dried up by the sun.
A global report published by the Water Resources Institute in August, ranked the UAE 10th out of 164 nations where water supplies are most stretched.
The Emirates is the world’s third largest per capita water consumer after the US and Canada.
UK-EU trade at a glance
EU fishing vessels guaranteed access to UK waters for 12 years
Co-operation on security initiatives and procurement of defence products
Youth experience scheme to work, study or volunteer in UK and EU countries
Smoother border management with use of e-gates
Cutting red tape on import and export of food
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Indoor cricket in a nutshell
Indoor Cricket World Cup – Sep 16-20, Insportz, Dubai
16 Indoor cricket matches are 16 overs per side
8 There are eight players per team
9 There have been nine Indoor Cricket World Cups for men. Australia have won every one.
5 Five runs are deducted from the score when a wickets falls
4 Batsmen bat in pairs, facing four overs per partnership
Scoring In indoor cricket, runs are scored by way of both physical and bonus runs. Physical runs are scored by both batsmen completing a run from one crease to the other. Bonus runs are scored when the ball hits a net in different zones, but only when at least one physical run is score.
Zones
A Front net, behind the striker and wicketkeeper: 0 runs
B Side nets, between the striker and halfway down the pitch: 1 run
C Side nets between halfway and the bowlers end: 2 runs
D Back net: 4 runs on the bounce, 6 runs on the full
The story of Edge
Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, established Edge in 2019.
It brought together 25 state-owned and independent companies specialising in weapons systems, cyber protection and electronic warfare.
Edge has an annual revenue of $5 billion and employs more than 12,000 people.
Some of the companies include Nimr, a maker of armoured vehicles, Caracal, which manufactures guns and ammunitions company, Lahab
KEY%20DATES%20IN%20AMAZON'S%20HISTORY
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Profile of Udrive
Date started: March 2016
Founder: Hasib Khan
Based: Dubai
Employees: 40
Amount raised (to date): $3.25m – $750,000 seed funding in 2017 and a Seed round of $2.5m last year. Raised $1.3m from Eureeca investors in January 2021 as part of a Series A round with a $5m target.
Mohammed bin Zayed Majlis
UFC Fight Night 2
1am – Early prelims
2am – Prelims
4am-7am – Main card
7:30am-9am – press cons
Silent Hill f
Publisher: Konami
Platforms: PlayStation 5, Xbox Series X/S, PC
Rating: 4.5/5
Banthology: Stories from Unwanted Nations
Edited by Sarah Cleave, Comma Press
Emergency
Director: Kangana Ranaut
Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry
Rating: 2/5
More coverage from the Future Forum
Timeline
2012-2015
The company offers payments/bribes to win key contracts in the Middle East
May 2017
The UK SFO officially opens investigation into Petrofac’s use of agents, corruption, and potential bribery to secure contracts
September 2021
Petrofac pleads guilty to seven counts of failing to prevent bribery under the UK Bribery Act
October 2021
Court fines Petrofac £77 million for bribery. Former executive receives a two-year suspended sentence
December 2024
Petrofac enters into comprehensive restructuring to strengthen the financial position of the group
May 2025
The High Court of England and Wales approves the company’s restructuring plan
July 2025
The Court of Appeal issues a judgment challenging parts of the restructuring plan
August 2025
Petrofac issues a business update to execute the restructuring and confirms it will appeal the Court of Appeal decision
October 2025
Petrofac loses a major TenneT offshore wind contract worth €13 billion. Holding company files for administration in the UK. Petrofac delisted from the London Stock Exchange
November 2025
180 Petrofac employees laid off in the UAE
Race card
5.30pm: Maiden (TB) Dh82,500 (Turf) 1,400m
6.05pm: Handicap (TB) Dh87,500 (T) 1,400m
6.40pm: Handicap (TB) Dh105,000 (Dirt) 1,400m
7.15pm: Handicap (TB) Dh105,000 (T) 1,200m
7.50pm: Longines Stakes – Conditions (TB) Dh120,00 (D) 1,900m
8.25pm: Zabeel Trophy – Rated Conditions (TB) Dh120,000 (T) 1,600m
9pm: Handicap (TB) Dh105,000 (T) 2,410m
9.35pm: Handicap (TB) Dh92,500 (T) 2,000m
Jurassic%20Park
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Infiniti QX80 specs
Engine: twin-turbocharged 3.5-liter V6
Power: 450hp
Torque: 700Nm
Price: From Dh450,000, Autograph model from Dh510,000
Available: Now
1971: The Year The Music Changed Everything
Director: Asif Kapadia
4/5
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
