Brit families face being £1,750 worse off in bigger economic shock than 1973 oil crisis

Fuel prices have spiralled to $240 (£182) a barrel and inflation has hit five percent

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The UK could be hit by an economic shock bigger than the 1973 oil crisis as families could be £1,750 worse off a year, according to think-tank the Institute for Fiscal Studies.

The staggering forecast comes as fuel prices spiral to $240 (£182) a barrel and inflation rockets to five percent, pushing fuel and food prices to record highs.

This has sparked fears that families will face a cost-of-living crisis as they struggle to buy everyday household essentials.

Tory MP Steve Baker, of the Conservative Net Zero Scrutiny Group, has said: 'I'm afraid I fear an economic crisis worse than the 1970s, but I don't wish to be too alarmist because what actually happens will depend on the policy response.

“I fear that we still have the biggest bond market bubble in history, that we had inflation coming anyway, and this crisis will feed the inflation that's coming. That will force the Bank of England's hand on interest rates,” Mr Baker told the Daily Mail.

Liberal Democrat leader and former Energy Secretary Sir Ed Davey agreed that the oil crisis could be “the biggest economic shock since the 1973”.

The 1973 oil crisis was caused by an embargo placed on oil by Saudi Arabia to target nations, including the UK, that supported Israel during the Yom Kippur War.

Following the embargo, the price of oil rose to nearly 300% triggering severe long-term economic consequences.

This made all transport significantly more expensive and there were even discussions that Brits would use rationing coupons left over from World War 2.

The "economic shock" predictions are made as the West continues to imposes sanctions on Russian oil and gas, the second largest producer of oil in the world.

Today, however, a glimmer of hope has been offered by the United Arab Emirates who say they are going to support the increasing production of oil and gas.

It is hoped the increase in production will offer Brits a lifeline, curbing the shortages of energy products in western countries.