If experts’ financial predictions for 2022 are accurate, Brits can expect to be hit with higher bills as well as rising interest rates and taxes. Photo: Getty
Brits are gearing up for 2022, with plenty of Christmas turkey and debt under their belt, as well as some financial resolutions for the new year.
Unfortunately, if experts’ financial predictions for 2022 are accurate, Brits can expect to be hit with higher bills as well as rising interest rates and taxes.
“We head into the year in the full and certain knowledge that either higher energy prices will push up inflation and force the Bank of England (BoE) to raise rates — or that more COVID shocks will keep a lid on inflation and growth, and rates will stay low,” said Sarah Coles, senior personal finance analyst, Hargreaves Lansdown.
“While making predictions in this kind of environment is fraught with difficulty, there are some things we can be relatively certain are on the cards for 2022,” she said.
Here are Hargreaves Lansdown’s top ten financial predictions for 2022.
1. Bills will get more expensive
The energy price cap will be reviewed and announced in February, and will kick in from April. This means there’s every chance that energy bills will rise significantly
Given the enormous rises in the wholesale price of gas, and the huge cost of company failures needing to be picked up by the industry, the cap is expected to rise by hundreds of pounds.
Read more: Financial resolutions for 2022 and how to make them stick
The cap isn’t a fixed and finite amount, it’s just a cap on the cost for the average user. It means those with big families, or large or inefficient properties could end up with significantly larger hikes.
2. Interest rates will be higher by the end of 2022
It’s difficult to see how rates could remain at 0.1% for the next 12 months, so rates will be higher at the end of the year than they are now, said Coles.
But the BoE is still juggling frailties in the recovery and rises will be slow and steady, rather than eye-watering overnight hikes
3. Brits will pay more tax
The Resolution Foundation calculated that by the end of this parliament, tax as a share of the economy will be at the highest level since 1950 — and up £3,000 ($3,975) per household since Boris Johnson became prime minister.
Tax on pay will be responsible for the lion’s share …….