Business groups fear government will halve energy support after March, while commuters face more disruption on the railway

Households in the UK spent £1.1bn more on groceries in December than a year earlier, taking Christmas spending to a record £12.8bn, but got fewer items in their baskets as rampant inflation hit home.

Many stocked up on alcohol to enjoy while watching the men’s football World Cup, with sales of beer reaching the highest level for the year on the day of England’s quarter-final against France on 10 December.

This was a big drop. Mortgage approvals fell by 11,800 in November, the biggest fall since April 2020 and are at their lowest level since June 2020. This is not the news the housing market was hoping for in the first week of the new year.

Mortgage approvals are the key lead indicator for housing transactions, lower mortgage approvals today means fewer housing transactions tomorrow. A reduction in housing transactions will hurt all those businesses that are involved in the home-moving process, but the absence of forced sellers implies that house prices will not fall as far or as fast as housing transactions.

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Huw Howells, head of manufacturing and industrials at Lloyds Bank corporate & institutional banking, said:

Manufacturers start 2023 on somewhat uncertain ground as December shows a fifth month of contraction.

There are silver linings in the supply chain, but unknowns remain for 2023, making forecasting difficult as manufacturers balance demand and supply.

Joseph Rowntree Foundation, consumer champion Martin Lewis and CBI chief urge PM to act urgently to help people with soaring energy bills

More on the new forecast for UK energy bills from Cornwall Insight, which spells more misery for millions of families across the UK.

The consultancy’s principal consultant, Dr Craig Lowrey, said:

It is essential that the government use our predictions to spur on a review of the support package being offered to consumers.

If the £400 was not enough to make a dent in the impact of our previous forecast, it most certainly is not enough now.

The government must make introducing more support over the first two quarters of 2023 a number one priority. In the longer term, a social tariff or other support mechanism to target support at the most vulnerable in society are options that we at Cornwall Insight have proposed previously. Right now, the current price cap is not working for consumers, suppliers, or the economy.