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Boris Johnson has made an extraordinary admission that many UK households will be forced to make difficult choices as the cost of living crisis takes hold.

With war raging in Ukraine, the economy still reeling from the impact of the pandemic, rising inflation and soaring energy bills UK households are facing an unprecedented squeeze on finances.

Disposable incomes are expected to be squeezed more heavily than at any time in 30 years, with the Bank of England predicting inflation will rise above eight per cent this spring and energy bills are set to rise to an annual average of £3,000 from October.

Asked whether families should eat cheaper food, not replace clothes, turn down the thermostat or turn heating off entirely, the Prime Minister said: “People obviously are going to face choices that they are going to have to make.

“We in the Government will do everything that we can to help and that is what we are doing.”

He went on to detail the measures already unveiled by Chancellor Rishi Sunak, including the 5p fuel duty cut and help towards soaring energy bills such as through the Council Tax rebate.

The Prime Minister said the Government would help families “in any way that we can”, including the £22 billion package of measures announced to support households “through what are unquestionably tough times caused by the end of the pandemic, the global inflation problem, the energy price spike”. Boris Johnson, Sajid Javid Rishi Sunak during their visit to the New Queen Elizabeth II Hospital in Welwyn Garden City (Photo: AFP)

Mr Johnson added that “most important thing” that could be done was to have a “strong, robust economy in which you have a high level of security in your employment”.

It comes as the UK hits its highest tax burden for 70 years, with the 1.25 percentage point rise in National Insurance Contributions (NIC) coming into effect today.

The Government has promised to invest £39 billion in health and social care over the next three years as a result of the tax increase, which came into effect on Wednesday.

But, in a sign of concerns about the effect on household finances, Chancellor Rishi Sunak raised the threshold at which people start paying national insurance from July, which will limit the impact of the new levy.

Speaking in Welwyn Garden City, Hertfordshire, on Wednesday, Mr Johnson said he had “absolutely no problem” with hiking National Insurance to help fund the NHS.

“I’ve got absolutely no problem with it. We’ve got to do the difficult things,” he said. “We’ve got to take the big decisions, the right decisions for this country.”