According to the Bank of England Governor, the cost of living will begin to fall within weeks.

The prolonged rise in prices is threatening household finances, with the latest figures showing that inflation remains stubbornly high at over 10 percent.

Yesterday Rishi Sunak stated that his plan was to win the fight against inflation. This is 'the thing making people feel poor' and consumers will 'feel a lot better by the end of this year’.

Andrew Bailey supported him, and in a major speech predicted better times ahead.

Other forecasters painted a positive outlook for the economy.

According to the Bank governor, "We expect to see a sharp drop in inflation over the course of the year," he said to the London School of Economics last night.

On a recent visit to Essex, Mr Sunak stated that he had a plan and it would work. It's hard to eradicate inflation from the system, but we have to keep at it.

"The plan we have is the right one. I hope you'll see the difference in your bank accounts. You will feel much better by the end of the year”.

The Bank has been trying to control prices through a series of rate increases, causing more pain for borrowers.

Yesterday's economic forecasts from S&P Global and Barclays both indicated that there was light at the end of the tunnel, with interest rates expected below 3 percent next year.

According to the S&P Global report, the Bank's recent hike to 4.25 percent last week may not have been the final one for the moment and predict rates will drop to 2.5% by 2025, according to the report.

According to Mr Bailey, the latest evidence points to "more resilient activity" in the economy as well as the jobs market.

Last week, inflation unexpectedly rose by 10.4% - indicating that prices are still rising.

The Bank is also concerned by the increasing number of workers choosing early retirement, which will increase the level of people who are 'economically inactive’.

Bailey stated that the phenomenon was "part of the reason" why they have had to raise interest rates so much.

He discussed what might happen if workers retired early enough to have enough savings to continue spending as before.

This would result in demand in the economy remaining the same, despite the fall in the supply of labour which would upset the delicate balance between supply and demand in the economy needed to keep inflation steady.

He stated that "We should expect this will put upward pressure on inflation and would require a higher rate of interest to dampen demand."