Gloom is describing what the near future looks like, as inflation is outpacing private sector wage earning by a factor of 4. This outlook, sweeping through the UK like a Tsunami at the end of this week, after warnings from the Bank Governor were announced. Mervyn King has described the recovery now as "choppy" and cut his prediction of how quickly the economy will grow next year.

The quarterly inflation report was released by the Bank of England cutting the forecast for growth in 2011 by just under a percentage pint to 2.5 per cent. The report also said inflation would remain above the target rate of 2 per cent until at least the beginning of 2012. The rate sits at 3.2 per cent currently.

Consumer confidence of the country as well as in the US has stifled growth and basically raised fears of a double dip recession occurring.

Mr. King warned: "Business and consumer sentiment have shown signs of softening, measures of financial fragility remain elevated and there is great uncertainty about the outlook for both the US and our most important trading partner, the euro area."

The government’s deep cuts in the public sector are also causing further turmoil in the housing sector as homeowners struggle to keep up with the mortgage, while others desperately try to remortgage and improve their financial condition.

On the retail front, food prices are increasing and sending bread up by 15p a loaf. This is due to the higher price of ingredients, mainly wheat. Petrol prices are raising also, and could be as high as 1.25 pounds per litre by 2011.

Howard Archer, chief economist at IHS Global commented: "With wage growth muted and a major fiscal squeeze increasingly kicking in, it is hard to see consumer spending being anything else than muted for an extended period."

On the job front, unemployment has fallen by 49,000 to 2.46 million, representing one of the lone bright spots of the report.