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There’s no denying it any longer. The crisis is here and it’s getting worse. The government and Central Bank are still in denial. Maybe they’re just incompetent. Possibly they’re lying to us.
Here’s an overview of what’s happening:
Shoppers are starting to buy in bulk
In a recent Barclaycard consumer survey, it was reported that consumer card spending rose by 17.7% compared to the same period in 2019. Spending on essential items grew 18.1%, mostly driven by increasing food and fuel prices.
This has led many shoppers to start buying non-perishable essentials in bulk.
90% of consumers are worried about the impact of rising household bills.
Fuel price rises are changing behavior
Due to rising petrol prices, 41% of drivers say they have changed the way they travel. Of these, 54% are walking more often, 38% are taking fewer long car journeys, and 22% have started cycling.
This could actually turn out to be a good thing. If we develop the habit of walking and cycling, this can only help the environment.
Inflation is continuing to rise
The official inflation rate is 7%, as of the end of March. It’s forecast to peak at around 9–10% later this year, although many expect it to be much higher.
Living standards fall at the fastest rate since the mid-1950s
The Office for Budget Responsibility (OBR) forecast that the standard of living would fall 2.2% in the financial year 2022–23. That would be the biggest fall in a single year since records began in 1956–57.
The energy price cap rises 54%, with more to come
The energy price cap is the maximum amount that energy suppliers are allowed to charge an average household for gas and electricity each year.
The price cap is reviewed twice a year. In October 2021 it rose 12% from £1,138 to £1,277.
On 1st April this year, it rose to £1,277, an increase of 54%.
A new report has shown that this could rise to around £3,000 in October. If that happens, the price will have risen 163% since last year.
Is inflation really only 7% a year? I find that hard to believe. Most people I talk with think it is much higher.
The state pension increase is only 3.1%
With the official inflation rate at 7% and expected to peak nearer 10%, the annual state pension increase is a pittance.
This means that the millions that rely on the state pension for their day-to-day expenses will see a drop in living standards of around 7%. That is worse than a severe recession.
More people turn to food banks to help make ends meet
For many in the UK, the choice is between heating and eating. As a result, many are turning to food banks.
The UK has around 2,200 food banks where the needy can get free food.
According to this article from November last year, the number of food bank users is soaring. The economic situation has gotten much worse since then.
A recession on the way?
As if the above isn’t bad enough, many experts are now predicting that the UK will fall into recession this summer.
How to survive this crisis?
There are things that we can do as individuals to survive the crises. The following articles have advice on how to spend less and earn more.