Rishi Sunak will be looking at the latest warnings from the Bank of England and wincing

It may not be obvious to the voters enduring financial hardships that the government has the right policies to restore the living standards they have come to expect, writes Sean O’Grady

The Bank of England has suggested a significant number of households will face financial pressure next year (PA)

Central bankers tend to speak in a language all of their own, part jargon, part euphemism, and, even in times of crisis, a certain calming understatement.

The Bank of England, founded in 1694, has long experience in the field, and its latest financial stability report should be interpreted accordingly. So it really is bad news when the Bank warns that “falling real incomes, increases in mortgage costs and higher unemployment will place significant pressure on household finances” in 2023. In translation, it means trouble in the housing market, with falling prices and a draining of the confidence that it always needs to maintain momentum.

When the mood is gloomy and uncertain, and the next movement in prices is expected to be downwards, buyers may well postpone their purchases, creating something of a downward spiral. Even first-time buyers, who ought to be able to take advantage of newly (slightly) more affordable real estate may be put off by the general economic pessimism and the trend to higher interest rates.