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Economist Julian Jessop warned that UK households could lose purchasing power over the coming year as prices rise amid conflict in the Middle East. The report does not provide a specific inflation forecast, quantify the expected effect on incomes or detail how the warning relates to measures in the 2026 Budget.
Economist Julian Jessop has warned that UK households should prepare for a possible fall in purchasing power in 2027, saying higher prices linked to conflict in the Middle East could erode real incomes over the coming year. The warning was reported by MoneyWeek after a live recording of its MoneyWeek Talks podcast; the report does not give a numerical forecast for inflation or the expected decline in household income.
Jessop said households’ real incomes will take a hit as inflation rises, according to MoneyWeek’s account of the event. Real income reflects what earnings can buy after changes in prices, so a rise in the cost of goods and services can leave households with less spending power even if their cash income does not fall.
The report links the price pressure to conflict in the Middle East, but does not identify particular goods or services expected to become more expensive. It also does not set out a forecast for inflation, wages or the length and scale of any squeeze. The headline’s reference to 2027 should be read alongside the report’s description of effects over the coming year, rather than as a precise date for a measured fall.
The comments were made during a live recording of the MoneyWeek Talks podcast, which MoneyWeek said was also available on YouTube. The supplied report gives Jessop’s warning but does not include a detailed transcript, supporting calculations or a response from government officials.
How Price Rises Could Squeeze Budgets
If prices rise faster than household incomes, families may have to spend more to maintain the same standard of living, or cut back on other purchases. That can affect everyday choices, from food and transport to discretionary spending. Jessop’s warning puts the purchasing power of household incomes at the centre of the economic outlook for the coming year.
The impact will not necessarily be the same for everyone. Households differ in their income, savings, spending patterns and ability to absorb higher bills. The report does not estimate which groups might be most exposed, or whether wage growth, benefits or other income changes could offset higher prices. It therefore signals a risk rather than establishing the size or distribution of any future squeeze.
The article presents the comments as budget aftermath, but the source material does not explain how a specific Budget policy caused, could prevent or might offset the forecast pressure. The warning is instead tied to rising prices associated with overseas conflict. That distinction matters: the report conveys an economist’s view of a potential economic effect, not a calculation of the Budget’s direct impact on household finances.
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The Warning and Its Limits
MoneyWeek reported Jessop’s remarks following a live podcast recording. Its account says the economist expects inflation to rise and real incomes to come under pressure over the coming year. This is a forward-looking assessment, not a report that a measured fall in purchasing power has already occurred.
The source material does not provide the date of the recording, an inflation series, a comparison with previous forecasts, or the assumptions behind Jessop’s view. Nor does it specify how the Middle East conflict could affect prices. Without those details, readers cannot use the report to determine which price categories may be affected, how long any increase might last, or how large the effect could be.
The available information also does not establish a formal forecast from a government department or statistical agency. The warning should be understood as Jessop’s stated assessment, as reported by MoneyWeek. The podcast was identified as available to watch on YouTube, but no additional claims or figures from the recording are included in the source material provided.
““Brace for a fall in purchasing power in 2027.””
— Julian Jessop, as quoted in the MoneyWeek report
Scale of the Household Squeeze
The report does not say how much purchasing power might fall, how many households could be affected or what inflation rate Jessop expects. It does not provide a time series or specify whether the warning applies uniformly across the UK. The exact basis for the 2027 timing is also not set out.
It remains unclear which prices are expected to rise, how directly the conflict in the Middle East would affect them, and whether other economic factors could offset or add to the pressure. The source does not discuss expected wage growth, policy responses or household support. Those gaps mean the warning cannot be treated as a settled outcome or a quantified prediction.
There is also no detailed explanation in the supplied report of how the 2026 Budget relates to the forecast. The article’s framing connects the warning to the Budget aftermath, but the reported explanation attributes the risk to conflict-related price rises. The relationship between Budget measures and the projected loss of purchasing power is not established by the available material.
Further Forecast Details Needed
The next useful information would be the full podcast discussion or a transcript showing Jessop’s assumptions, the prices he expects to rise and the timeframe behind his 2027 warning. Any subsequent inflation and wage figures could help establish whether household purchasing power is in fact being squeezed, but the supplied report contains no such data or update.
Readers should also look for future official economic releases and any explanation of how Budget measures might affect household incomes or costs. Until more detail is available, the confirmed development is Jessop’s warning, not a verified forecast of a particular fall in living standards. The amount and duration of any impact remain open.
Key Questions
Who warned that purchasing power could fall in 2027?
Julian Jessop, an economist, made the warning during a live recording of the MoneyWeek Talks podcast, according to MoneyWeek.
What reason did Jessop give for the possible fall?
MoneyWeek reported that Jessop linked the risk to higher prices and rising inflation associated with conflict in the Middle East.
How large is the expected fall in purchasing power?
The report provides no numerical estimate for the fall, an inflation forecast or a calculation of its effect on household incomes.
Has a fall in purchasing power already been confirmed?
No. The report presents a warning about a possible future squeeze in real incomes. It does not document a measured fall that has already happened.
Does the report explain how the 2026 Budget affects the forecast?
No specific Budget measure is linked to the forecast in the supplied report. It attributes the risk to conflict-related price rises, while the direct relationship to Budget policy remains unclear.
Source: moneyweek.com
