Officials say a growing number of low-income households now hold less than two weeks’ worth of savings, leaving them extremely vulnerable to further price shocks.
Meanwhile, the jobs market may also begin weakening.
The Bank warned that uncertainty caused by the Iran conflict could make both consumers and businesses more cautious. Families may begin spending less to prepare for tougher times ahead, while companies facing higher costs may slow hiring or reduce staff altogether.
Economists fear unemployment could begin rising again if businesses cut back investment and consumer demand weakens.
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