Charities warn more Scots face poverty as prices soar

Thursday 11 August 2011

CHARITIES have warned that more Scots will be forced into poverty by soaring prices after the Governor of the Bank of England said inflation could reach 5% by the end of the year.

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VICTORIA WELDON and ALISON CAMPSIE

Families and pensioners will be among the worst hit as fuel, food and clothing costs soar should the prediction by Sir Mervyn King come true, as he warned of years of continuing gloom for the UK economy.

Sir Mervyn, who believes the main risks to the economy come from the troubled eurozone, said inflation was on track to reach the peak figure within months.With consumer spending being squeezed and wages failing to keep pace with the rising cost of living, charities believe many families and pensioners will be the worst hit.The Child Poverty Action Group in Scotland claimed many children could suffer as parents struggle to make ends meet.Spokesman Imran Hussain said: “There has been a huge improvement to child poverty with around 900,000 being taken out of poverty since 1999.“However, that progress is going to be slammed into reverse.“If prices continue to rise, we’re going to see a significant increase in child poverty and this is going to have an impact on factors such as children’s health and education outcomes.“Families are really struggling as living costs are rising rapidly and incomes aren’t moving to match them.“Lots of families are worried about the future, they’re struggling to make ends meet and that’s going to lead to a lot of debt”.Charity Age Scotland said that more older people could be facing poverty if bills continue to rise.Doug Anthoney, of Age Scotland, said: “If inflation reaches that point, it will have a significant impact on older people, many of whom are really struggling to pay for energy and food.“This is coming on the back of massive increases in fuel costs and it could well mean that more older people are found to be living in poverty.”Peter Kelly, director of The Poverty Alliance, claimed that the poor would be the worst affected.”He said: “Not surprisingly higher rates of inflation will hit some of our poorest families hardest.“The increases in fuel costs will make life increasingly tough for these families.“When we add to this the fact that the costs of many other basic goods and services are rising, then it is clear our economic and social policies are not protecting those most in need.“The UK Government needs to think again about the policies it is pursuing, particularly those where benefits are being restricted or frozen.“There is also a responsibility for the energy companies to do more to protect the most vulnerable, and invest more to ensure that the poorest customers are not paying more than everyone else, as is still often the case.”Sir Mervyn said Britain faces a long slow recovery from its financial woes.His warning comes after the world economy worsened due to the eurozone crisis and the US debt shock. He said: “The outlook for growth in the world economy has deteriorated and, largely as a consequence, near-term growth prospects at home are somewhat weaker.”The news comes as it was revealed that consumers are growing more concerned about utility bills and fuel and food prices.A survey conducted by information management firm Nielsen showed that almost one-third of householders claim that they have no spare cash due to rising prices.The Consumer Confidence Survey also showed that 65% of shoppers are switching to cheaper grocery brands in a bid to save money.

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Charities warn more Scots face poverty as prices soar

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