LONDON, Feb 4, 2022 (BSS/AFP) - Britain's government scrambled on Thursday to head off a political storm as households were hit with a dramatic rise in energy prices and borrowing costs on the back of surging inflation.

  Retailers are warning that the price pressures will inevitably feed through into household staples, heaping political pressure on Prime Minister Boris Johnson heading into nationwide local elections in May.

  Johnson, battling demands to resign as the police investigate a series of lockdown-breaching parties held in Downing Street, voiced hope that the intensifying crisis in the cost of living would ease.

  "What I hope and believe is that eventually, as the world economy gets its momentum back, the inflationary pressures will start to subside," he told reporters.

  It would help to "ease those problems in the supply chain" and "get people to work in the jobs where they are needed", Johnson said.

  But Richard Walker, managing director of supermarket chain Iceland, told BBC radio that 2022 "is probably set to be the hardest year ever for many UK families".

  "In terms of grocery retail, every supermarket will be raising its prices," he said.

  The government, having already spent gargantuan sums on combatting the coronavirus pandemic, was forced to intervene with another package of financial support after the state energy regulator lifted prices.

  - 'Catastrophe' -

  From April, the annual price cap for consumers who are not on a fixed deal with their energy supplier will rise by 54 percent to o1,971 ($2,680, 2,350 euros) in England, Wales and Scotland, the regular Ofgem said.

  "The energy price cap rise will turn the cost-of-living crisis into a catastrophe for millions of people," Sharon Graham, leader of the Unite trade union, said.

  "This will plunge at least one in four families in Britain into fuel poverty," she added.

  "Fuel poverty" is defined as when households fall below Britain's official poverty line once they have paid their heating bills.

  Finance minister Rishi Sunak -- tipped as a contender to become prime minister if Johnson is forced out -- is already raising taxes to help foot the pandemic bill, adding to household pressures.

  Sunak rejected opposition Labour demands to levy a windfall tax on energy companies, on the day that Shell announced mammoth net profits in 2021 of $20.1 billion.

  But the chancellor of the exchequer did roll out the package worth o9 billion targeted at 28 million poorer and middle-income households.

  "For me to stand here and pretend we don't have to adjust to paying higher prices would be wrong and dishonest," Sunak told parliament.

  "But what we can do is take the sting out of a significant price shock for millions of families by making sure the increase in prices is smaller initially and spread over a longer period."

  The Bank of England said Britain's annual inflation rate would peak at 7.25 percent in April, compared with 5.4 percent last December, which was already near a 30-year high.

  - 'Thelma and Louise' -

  Mortgage costs will rise for millions of British homeowners after the central bank lifted its main interest rate for the second month in a row -- to 0.5 percent -- in a bid to tackle the inflationary pressures.

  And more hikes to mortgages and bank loans are in the works, it said, warning that "some further modest tightening in monetary policy is likely to be appropriate in the coming months".

  A combination of Johnson's "partygate" woes and the inflationary shock have helped Labour build a double-digit poll lead over the prime minister's Conservative party.

  And with Sunak seen as a likely successor to Johnson, Labour leader Keir Starmer has been widening his attacks beyond the beleaguered prime minister.

  Starmer on Wednesday called Johnson and Sunak the "Tory Thelma and Louise, hand in hand as they drive the country off the cliff and into the abyss of low growth and high tax".

  The chancellor himself was coy about his leadership prospects on Thursday, when asked in a BBC interview about the backing he has received from some Conservative MPs to replace Johnson.

  "Well, that's very kind of them to suggest that, but what I think people want from me is to focus on my job," Sunak said.