Spiralling cost of living: people in denial as ‘crisis like 1930s’ looms

Professor Richard Murphy of Sheffield University many people remain “in denial” as the don’t want to come to terms with the scale of the difficulties ahead due to spiralling fuel costs and overall high inflation.

“It’s very easy to be in denial about this because it’s so grim, you don’t want to come to terms with it,” the political economist said.

“In my view it means, unless the government helps, I know that a very large number of people in Northern Ireland, up to the half the people in Northern Ireland and maybe more, will not be able to pay all their bills.

“I think the government will have to spend £100 billion pounds a year to save our economy, but it could be more, but that is less than the Covid crisis.

“That is the scale of the issue we are facing.”

Speaking on BBC Radio’s Nolan Show on Tuesday, he said: “The warning bells are not just red lights, they are triple red lights, they are bells going off all over the place, they are panic buttons in my head.

“I am sorry to sound so dramatic about this... [but] there are already families who simply do not know how to make ends meet.”

Prof Murphy said people generally were not yet contemplating spending even £300 per month on fuel, when some estimates suggest the cost could rise much higher.

“We are talking about it potentially going to £500 per month,” he said.

Prof Murphy went on to say: “The overall situation is that we are going to have over half of households in fuel poverty.

“And if the top end numbers happen we will have households being asked to pay 35% to 40% – that’s 35-40p in every pound they get – in fuel bills.

“Let’s not beat around the bush, no one can do that because you just can’t then feed yourself, pay the rent, pay the council tax or whatever it is.

“All of those bills have got to be paid... it’s just not possible.

“So we are talking about a situation where, unless the government takes action, we are looking at, bluntly, mass poverty and millions of people being forced into bankruptcy in effect unless the government helps. So the government has got to.

“And yet at the moment, as we listen to what Rishi Sunak and Liz Truss are saying, there’s no sign of apparent panic or concern on their part.”