If you don't live in the UK, it's probably quite difficult to understand what a problem has become - and it's not anywhere near it's peak yet. I'll not go into the causes, but it's clearly a combination of Brexit, supply issues after Covid and the Ukraine war. I'm not having a go at any ex-pats at all, but I do think that unless you're in the UK you can't imagine what it's like at the minute. Plenty of people are seriously concerned about the coming winter. I'm not talking about old people, I'm talking about ordinary people - families, young people renting, pensioners. We're talking tens of millions of people and it's common to hear people talking about their fears of the winter and what's coming. Money and the wider economy is becoming something that is a major, major talking point in a way that I've not seen before and I'm pushing 50.
I'd say that in the last 18 months, we've noticed our shopping bill go up about 25% a month - easily. It is common now to see prices increasing on every food item every month. It goes up 5p, 10p, 10p again. It doesn't sound a lot but it adds up very quickly. I'm very lucky that I've got a good job and it's more of an annoyance, but there's parents - yes parents, not a parent - in out sons school who literally have set amounts to spend on food. They are struggling now, just with food. I shopped at Morrisons tonight and everything I bought was 10p more expensive than in Tesco - it's becoming noticeable even for people who can afford the prices rises. Morrisons was dead, but you will never find a quiet time in Aldi.
As for energy, I have plenty of friends who's gas/electric bills have gone - just in the last year - from about £180/month to £360 and that's about to go up to £500-600 a month for some. These are the ones who who were simply unlucky enough to fix the prices 18 months ago. They did nothing wrong. Luckily, they can afford it if they cut back in other areas but just think about that, within a year imagine having to find £320-420 a month extra. When you add in the cost of food, it's easy to imagine people having to spend an extra £600 a month. We're talking about people taking on an extra mortgage and there's no end in sight - it's only going up.
Now, for most people in the UK we only get a payrise annually which is tied to inflation normally. If you get 2% or so that keeps you in line with inflation and above that, it's a rise. Culturally you're talking about a few thousand pounds roughly per year as a norm. However, if inflation is going to hit 15-20% we're going to see people asking for £7k payrises JUST to cover the utilities alone. They will still be worse off than they were as food prices, petrol etc are going up. Employers who pay this will have to put up prices, which feeds back into the economy. Bear in mind, our inflation index doesn't include things like rent, house prices and I'm fairly sure gas and electric too. So, when you hear about it hitting 10% it's not. It's more like 30% I'd say for a lot of people and the wages just aren't covering that.
On top of all that, interest rates are going up. That means that mortgages, credit cards, overdrafts, loans etc are going to cost more. And a lot of rents are pegged to interest rates via mortgages too. That is also costing people more money. A LOT of businesses took loans out during the pandemic to cover it and they are now in a position where they are still recovering and now have more to pay back. It's common to hear stories of businesses who's annual gas/electric bill was £20k are now being expected to pay £70k now. There's simply no way they can carry on unless they put prices up. But at the same time, people have less to spend.
And finally, because the price of gas/electricity is going up - and there's nothing individuals can do about this - prices across the board are going up. The guy who runs our local chippy was telling me he's absorbing a lot of the energy bill rises as he knows his customers will just not pay the 'real' figure but he can't carry on for much longer.
The war is not going to end in the foreseeable future and I can imagine Putin will see this as a 'war of economic attrition'.
We're not talking about a situation where we can say "tighten your belt", it's way, way, way beyond that. We're talking about a situation where within 12 months people are having to find several hundreds of pounds per month extra to pay just the basic bills. Have a guess how Christmas is going to look to a lot of people, and how hospitality etc will look in the New Year.
I honestly think that once the new PM comes in, she will be forced to basically cover loans to the energy companies. It's going to dwarf anything that Covid did - this winter is projected to cost us £100bn when the entire Furlough Scheme cost around £40bn. All it takes now is a hard winter and it's absolutely possible to imagine scenes we've not seen in the UK in living memory. This is likely to mean that on top of everything else, taxes will go up.
All that said, this isn't to say that our situation is unique and there are problems in the US and Australia, no question. However, all I'm trying to say is that for tens of millions of people - and you too - this is a truly unique situation for us. It's something we've never experienced.
The truly scary part though, is that the next PM is fucking clueless. Just when we need a leader with brains, vision and leadership we're going to be lumbered with another fucking useless clown.
