Poor families are struggling to make ends meet because of a sharp rise in the price of basic goods in recent years.
Since 2008, the cost of necessities has risen 28% while average wages have only gone up 9%, according to a report from charity the Joseph Rowntree Foundation (JRF).
The JRF found a single person needed to earn £16,300 a year to afford a minimum acceptable living standard, while a couple with two children needed to be bringing in £40,600.
Bank of England Governor Mark Carney said his warning that record-low interest rates will rise sooner than markets expect was "a personal view."
ITV News Economics Editor Richard Edgar reports:
Committee chairman pressing Carney that his Mansion Hse speech which took markets by surprise was a personal view.
It was the intended consequence of your speech to change expectations about the first move on interest rates, Carney is asked: "Absolutely"
Bank of England Governor Mark Carney told MPs there has not been an acceleration in "actual earnings" growth.
He told the Treasury Select Committee, "Since 2008 there's only been six individual months in total where average weekly earnings has been above inflation".
ITV News Economics Editor Richard Edgar writes:
After all the excitement about an imminent rise in rates, Carney tells committee of MPs that the data on wages is still weak[so no need yet?
Calm down everyone: Carney says what matters to borrowers is not the timing of first rate rise but their path: "gradual but limited" rises.
House prices are "spinning further out of control", a leading housing charity has warned after figures showed a 9.9% annual rise in UK values.
Campbell Robb, chief executive of Shelter, said: “Each rise in prices means more people stuck living in their childhood bedrooms, or trapped in the cycle of moving from one expensive rented home to the next.
“Worryingly, as house prices continue to rise some will be tempted to overstretch themselves in a frantic bid to get on the property ladder. But with interest rates currently at historic lows it’s a real concern that many might find themselves struggling to make ends meet in the future."
He added: “This is a problem that the government can fix. We need a new generation of quality part-buy, part-rent homes, and to make sure that small builders can get hold of the land and finance necessary to build them."
George Osborne says today's inflation figures show further evidence of Britain's economic security.
Asked whether house price rises of 9.9% were a cause for further action, the Chancellor said the Bank of England had been given further powers to intervene if necessary.
Brits are "still feeling the squeeze" despite inflation falling to a four-and-a-half-year low, Labour claim.
Wages after inflation have now fallen by over £1,600 a year under David Cameron and the link between the wealth of the nation and family finances is broken.
A huge turnaround would be needed to ensure working people aren’t worse off than when this Tory-led government came to office.
Inflation could fall to 1% by the end of the year, a leading economist has claimed.
Samuel Tombs, UK economist at Capital Economics, said producer price indicators, the strength of the pound making imports cheaper, and political pressure on energy bills were likely to see inflation ease further for the rest of the year.
"Against this low inflation backdrop, we believe the MPC is likely to tread cautiously and raise interest rates only very gradually over the coming years," he said.
First-time buyers face having to pay 10.7% more to get on the property ladder than they did a year ago, new figures show.
The typical starter home now costs £199,000, according to the Office for National Statistics.
The news follows calls for the Bank of England to take action against spiraling values, with some urging a dilution of the controversial Help to Buy scheme for buyers with lower deposits.
The Government says the scheme is working as intended to reach people who need its help the most.
Despite a recent fall to the lowest level since 2009, inflation (1.5%) still remains comfortably above the average rate of pay increases (0.7%).
This means the average worker's wages are still falling in real-terms, according to the latest available figures.