Is the cost of living crisis coming to an end?

With CPI inflation soon to fall below average earnings growth, the cost of living crisis appears to be coming to an end. But households won’t suddenly stop feeling the pinch. We suspect the level of real household disposable income will remain below where it was before the pandemic until early 2025. And with the full effect of higher interest rates yet to feed through, we still think the economy will enter a mild recession later this year.