IT was all so predictable, and is manifesting itself in a textbook manner, but an understanding of the cause-and-effect relationship is cold comfort for the millions of people affected and the economy.

What was so predictable was the consumer squeeze that is now well under way across the UK.

The inevitability of it all was highlighted in this column around the turn of the year, and things have transpired pretty much exactly as predicted. And, unfortunately, it looks like there is worse to come.

A plunge in the household saving ratio to 3.3 per cent in the fourth quarter of last year - the lowest since records began in 1963 - underlines just how stretched consumers are right now. The ratio, an estimate of the amount of money households have available to save as a percentage of their total disposable income, fell from 5.3 per cent in the third quarter of last year.

And household disposable incomes dropped 0.4 per cent quarter-on-quarter in the final three months of 2016.

A survey published this week by the Chartered Institute of Procurement & Supply showed growth of UK manufacturing output slowed in March to its weakest pace since the current run of expansion began in August last year.

And it was no surprise at all, given the backdrop of strained household finances, that the slowing of manufacturing growth was centred on consumer goods producers.

Consumers have been playing far too big a role in the UK’s sadly below-trend economic growth under the Conservatives since 2010, with the Tories’ slashing of corporation tax having failed to deliver the much-vaunted rise in business investment or the promised “march of the makers”.

As the UK Government pursues its further £12 billion of cuts in annual welfare spending, consumers will take a further hammering. We have read a lot about the latest wave of cuts this week and their impact on people on low incomes. The cuts are an utter disgrace from the viewpoint of society, at a time when former prime minister David Cameron told the country everyone was going to be in this together. And they will also bear down heavily on already hard-pressed households’ finances and the economy.

Worries over consumer debt have been hitting the headlines this week.

On Monday, the Financial Conduct Authority proposed new rules to help customers who are in persistent credit card debt. Its intervention follows its own study, which found “significant concerns about the scale, extent and nature of problem credit card debt”.

The FCA estimates around 3.3 million people are in “persistent debt”. Under the FCA’s definition, credit card customers are in persistent debt if they have paid more in interest and charges than they have repaid of their borrowing, over an 18-month period.

Meanwhile, the Bank of England expressed concern this week that rapid growth in unsecured lending to UK consumers could endanger banks if credit standards were slipping.

A survey published this week by the British Retail Consortium and market researcher Nielsen showed annual UK food price inflation had jumped to one per cent in March, its highest rate since February 2014. Market researcher Kantar Worldpanel meanwhile warned on Tuesday that inflation would continue to accelerate, as it estimated rising prices of everyday goods had cost the average household an additional £21.31 during the past 12 weeks.

Rising food costs also played a key part in the jump in annual UK consumer prices index (CPI) inflation from 1.8 per cent in January to 2.3 per cent in February, significantly above the two per cent target set for the Bank of England by the Treasury.

And annual UK CPI inflation has overtaken earnings growth to signal a real-terms fall in pay.

Figures published last month by the Office for National Statistics put annual pay growth in the UK in the three months to January at 2.2 per cent.

Of course, while the Brexiters will not want to be reminded of the fact and might even try to insist it is not the case, we should bear in mind that last June’s vote by the UK electorate to leave the European Union is playing a very big part in all of this. This vote has triggered the surge in inflation. And the much weaker economic prospects following the vote will dampen pay settlements this year.

Surging inflation, fuelled in large part by the pound’s post- Brexit vote weakness and its impact on the sterling cost of imports, looks certain to drag down already unimpressive UK growth significantly further this year. And UK growth was only 1.8 per cent last year – well adrift of a long-term average annual rate that has been put at about 2.75 per cent by Bank of England Governor Mark Carney.

This is obviously further bad news for Scotland, which has seen its economy hit hard by the broader impact of the oil and gas sector downturn, and by falling construction output as big infrastructure projects come to an end. A seemingly much greater fall in business confidence than in other parts of the UK in the wake of the Brexit vote is also weighing on Scotland. And the prospect of a second independence referendum is being cited by economists as another factor that could, like the UK’s planned EU exit, dampen corporate investment.

Scottish gross domestic product figures this week were woeful, showing a 0.2 per cent fall in output in the fourth quarter of last year and expansion of only 0.4 per cent over 2016 as a whole.

However, the impact of the severe squeeze on household finances caused by surging inflation and billions of pounds of further cuts by the Conservative Government to the welfare bill will be felt right across the UK. And, in spite of the John Bull mood of some of the Brexiters, this impact will be felt most acutely.