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The Great Squeeze: Cost of Living Crisis 2022

My local is £3.60 for a lager at the bottom of the quality scale now. It was £3 flat before the pandemic and was usually flat ...

It is starting to change people's habits, Friday lunchtime drinks used to be the norm in our London office, now people are holding back.
 
My meal out was excellent, with a rough 20% increase over the last year.
Typical small country pub.
Mains now around £15, posh lagers a fiver, decent cask around £4.
Always a hidden vegan menu of half a dozen items.
Near the new M55 junction, Hand and Dagger, well worth a free plug.
Meant to be where a certain Mr Wardley met Mr G Thompson to discuss plans for Nemesis/Big One.
Allegedly.
Think it might be in Wardley's book.
 
I know this has been discussed before but I think it would be interesting to know people's current views: what do you think the government should do to ease this crisis?

I've said before but I don't see any real way to get out of this crisis currently. There are things that would probably help though, perhaps the government should subsidise essential food and the like. Also instead of this 150 quid they are sending out I don't know why they don't temporarily subsidise the energy sector, take 5-10% of everybody's energy bills. The thing is I don't know the practicalities of them doing that, it would also cost a lot of money which I think is the main issue. Long term solutions are available, like moving away from energy supplies from other countries to renewables and Nuclear energy. I just don't see many short to mid term solutions.

The thing is this crisis is so broad and so many factors are effecting different things. Energy is just one of them, food being another, It's caused by lots of things: The war in Ukraine, Brexit and other global supply problems. The knock on effect to tourism for example is going to be huge, people aren't going to be staycation'ing or going abroad simply because they have no disposal income.
 
There are no easy answers here.
The east chases western styles, and demand for all goods increases with world population, increased demand for meat, and the desire for goods from the other side of the world.
Population and the demand for energy grows, pushing up prices, supply of energy is limited by producers who benefit from higher fuel prices.
Governments can do little to stop inflation, especially with a governing party that believes in market forces...that is on the very skint side of skint after the massive costs of covid.
The well off and comfortable tend to do well out of inflation in the long term, the poor and less well off get hammered.
Lots of people are doing well and will continue to go on holiday, here and abroad.
Those that can't afford holidays, well they couldn't afford them before anyway, but now have a horrible eat/heat choice.
As ever, the gap between rich and poor only widens over the decades.
 
It’s tough - our company has put wages up 5% but it’s still not enough
We’re getting squeezed left right and centre by suppliers but putting prices of our product up further makes us uncompetitive compared to the foreign imports
 
JAperson said:
I know this has been discussed before but I think it would be interesting to know people's current views: what do you think the government should do to ease this crisis?

I've said before but I don't see any real way to get out of this crisis currently. There are things that would probably help though, perhaps the government should subsidise essential food and the like. Also instead of this 150 quid they are sending out I don't know why they don't temporarily subsidise the energy sector, take 5-10% of everybody's energy bills. The thing is I don't know the practicalities of them doing that, it would also cost a lot of money which I think is the main issue. Long term solutions are available, like moving away from energy supplies from other countries to renewables and Nuclear energy. I just don't see many short to mid term solutions.

The thing is this crisis is so broad and so many factors are effecting different things. Energy is just one of them, food being another, It's caused by lots of things: The war in Ukraine, Brexit and other global supply problems. The knock on effect to tourism for example is going to be huge, people aren't going to be staycation'ing or going abroad simply because they have no disposal income.
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There is pretty much zero the government can do about Ukraine, energy prices will have to rise and nothing the government can do about it short term other than giving in to Putin and his cronies.

But I can tell you what they shouldn't be doing - raising National Insurance at a time when people can't afford it. Tax rises are inevitable. The government must raise taxes eventually to pay for the masses of debt we've amassed during Covid. But now is not the time, borrowing is still cheap and whilst I don't encourage the government to carry on spending like there's no tomorrow, a tax rise right now is completely counter productive.

Who will pay the new tax rise? It won't be the rich, they already have schemes in place to avoid it. It'll be normal people, who then cut back their spending on other things to afford their fuel bills and thus could potentially put us into recession. Recession is something else that the rich can afford at the expense of the rest of us (they'll pretend they can't by the way, but it's not Ferraris and mansions they'll be cutting back on, it'll be donations to the Tory party and we can't have that now can we!).

The economy is in crisis. We can't afford our fuel, we can't afford the cost of inflation as a result of said fuel increases and the government has no control whatsoever on the public finances, so the Prime Minister and Chancellor of the Exchequer have decided it's a good time to implement a good old fashioned tax rise because they're too preoccupied with whether they remember attending lockdown parties or not.

But there's a war on after all. If enough people look over at Ukraine, they might forget about what a shambolic government they have running their own country (the kind of government that ships refugees off to Rwanda because they don't know how to deal with them). War is a crap politicians best friend. We stand with Ukraine - so that we can pretend we don't have an incompetent government.
 
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Matt.GC said:
There is pretty much zero the government can do about Ukraine, energy prices will have to rise and nothing the government can do about it short term other than giving in to Putin and his cronies.

But I can tell you what they shouldn't be doing - raising National Insurance at a time when people can't afford it. Tax rises are inevitable. The government must raise taxes eventually to pay for the masses of debt we've amassed during Covid. But now is not the time, borrowing is still cheap and whilst I don't encourage the government to carry on spending like there's no tomorrow, a tax rise right now is completely counter productive.

Who will pay the new tax rise? It won't be the rich, they already have schemes in place to avoid it. It'll be normal people, who then cut back their spending on other things to afford their fuel bills and thus could potentially put us into recession. Recession is something else that the rich can afford at the expense of the rest of us (they'll pretend they can't by the way, but it's not Ferraris and mansions they'll be cutting back on, it'll be donations to the Tory party and we can't have that now can we!).

The economy is in crisis. We can't afford our fuel, we can't afford the cost of inflation as a result of said fuel increases and the government has no control whatsoever on the public finances, so the Prime Minister and Chancellor of the Exchequer have decided it's a good time to implement a good old fashioned tax rise because they're too preoccupied with whether they remember attending lockdown parries or not.

But there's a war on after all. If enough people look over at Ukraine, they might forget about what a shambolic government they have running their own country (the kind of government that ships refugees off to Rwanda because they don't know how to deal with them). War is a crap politicians best friend. We stand with Ukraine - so that we can pretend we don't have an incompetent government.
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You raise a good point @Matt.GC I only asked the question because all I hear from people around me is that Boris should do something, the thing is I can't see what can be done. The sacrifices we are making are considerably less than what Ukraine is going through and we should be grateful for that.

About National Insurance it should've been going up in the first place, even if they still wanted to put it up it should've been postponed until after the war but the government is greedy. Like you say borrowing is still cheap at the moment and it makes sense to be careful yes but to not start taking advantage of people who can't afford it.

I admit I know less about the tax system than I should, I'm young and I'll happily admit that I don't know about these sort of things, I want to learn more about this sort of thing and that's why I like to hear other people opinions. It's a times like this that I wonder why in school they don't teach you about these sort of things. Maths GCSE is all about algebra but nothing about money, tax and the like. It's very silly, in fact that sort of thing could well help now if it was done years ago. I know it's a bit off topic but I thought was relevant to mention because of the strange situation we as a country find ourselves in.
 
It rather annoys me that at a time of tax hikes on the British Mainland, those living in British overseas territories, the companies based there and the many dodgy offshore accounts pay little or no tax. I would have thought the terrabytes of leaks would have solved this but apparently not.
 
JAperson said:
You raise a good point @Matt.GC I only asked the question because all I hear from people around me is that Boris should do something, the thing is I can't see what can be done. The sacrifices we are making are considerably less than what Ukraine is going through and we should be grateful for that.

About National Insurance it should've been going up in the first place, even if they still wanted to put it up it should've been postponed until after the war but the government is greedy. Like you say borrowing is still cheap at the moment and it makes sense to be careful yes but to not start taking advantage of people who can't afford it.

I admit I know less about the tax system than I should, I'm young and I'll happily admit that I don't know about these sort of things, I want to learn more about this sort of thing and that's why I like to hear other people opinions. It's a times like this that I wonder why in school they don't teach you about these sort of things. Maths GCSE is all about algebra but nothing about money, tax and the like. It's very silly, in fact that sort of thing could well help now if it was done years ago. I know it's a bit off topic but I thought was relevant to mention because of the strange situation we as a country find ourselves in.
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They did teach about it in school - business studies and economics:)
 
Thameslink Rail said:
It rather annoys me that at a time of tax hikes on the British Mainland, those living in British overseas territories, the many offshore accounts and the many companies based there pay little or no tax. I would have thought the terrabytes of leaks would have solved this but apparently not.
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The thing is as much as I agree, they are not part of the UK mainland and they have there own constitutions and governments, with limited powers for the UK (usually only the military and some international relations). The UK government cannot and should not break the law of these territories, they choose there own politicians and have there own courts, It's up to them to do the right thing unfortunately. It would also be wrong the UK government to tax these territories because they have little to do with the UK mainland and they receive very few of the services that UK citizens get, such as they pay for there own healthcare, with different providers (some nationalised but not all) in the individual territories.

Jb85 said:
They did teach about it in school - business studies and economics:)
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Yes but it should be standard curriculum, they were options and some of us weren't clever enough to be allowed to pick all our own options. It should be part of maths rather than half the rubbish they teach you that most people are never going to use.
 
JAperson said:
The thing is as much as I agree, they are not part of the UK mainland and they have there own constitutions and governments, with limited powers for the UK (usually only the military and some international relations). The UK government cannot and should not break the law of these territories, they choose there own politicians and have there own courts, It's up to them to do the right thing unfortunately. It would also be wrong the UK government to tax these territories because they have little to do with the UK mainland and they receive very few of the services that UK citizens get, such as they pay for there own healthcare, with different providers (some nationalised but not all) in the individual territories.
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I agree with most of this however the biggest problem with these overseas territories is the offshore accounts. The loopholes that allow mainland Brits to have accounts in tax havens should be closed as they should be paying their fair share into society. It is particularly frustrating that David Cameron was named in the Panama Papers scandal in 2015 after five years of austerity...
 
Thameslink Rail said:
I agree with most of this however the biggest problem with these overseas territories is the offshore accounts. The loopholes that allow mainland Brits to have accounts in tax havens should be closed as they should be paying their fair share into society. It is particularly frustrating that David Cameron was named in the Panama Papers scandal in 2015 after five years of austerity...
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I agree with this but it's a loophole because of the citizenship rights that are part of being a BOT (British overseas territory). The BOTS citizens get basically free movement here and we get easy movement in return. The reason it's not free for UK citizens is because the BOT's simply aren't big enough or don't have the infrastructure to cope with a large influx of population. I think the only solution to this is that you have to be living in a BOT to setup an account, which I think would mainly solve this problem.
 
I think Covid was a big part in all of this. Having the 1st lockdown 2 years ago our sister company was forced to go bankrupt resulting in 40+ workers been made redundant then over the next 12 months (June 20 to June 21) work orders had really dried up so they furlough more than half the work force cause of the microchip business only just slowly picking up now. By September they had only brought 6 of them back with the rest made redundant when the furlough payments ended.
I’m not struggling as our mortgage is low and the misses works part time but I know some at work would struggle if the overtime stopped cause of having cars on lease or repayment schemes.
With the new electric and gas prices can see our basic monthly bills going up to £1600.
 
Two of my favourite country pubs have closed in recent weeks, less than a mile apart.
Could not juggle the numbers to keep the places going with new cost levels by all accounts.
As an old git, I have had to increase my working hours by ten percent just to stand still.
Three years to mortgage pay off, then party.
 
BarryZola said:
Depends if Vlad dies in the next couple of months. If he bites the dust we'll probably be OK-ish, if not, you're correct.
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Not sure it makes a diff at this point. I don't think Putin going would in and of itself be enough to lift Russian sanctions rapidly (nor should it be). But even if it does, and prices drop rapidly - that would lead to GDP falling which if sustained long enough is by definition a recession.

Alternatively prices don't drop and people cut back spending - GDP also drops.

Either way, it's a recession.

I don't accept that it's a recession that will have been caused by the invasion of Ukraine either - it's definitely a factor, along with Brexit and the pandemic but I think really the biggest cause will be the decade+ of lost growth and ideological austerity we have endured.
 
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The thing with Ukraine is that it can be the difference between how bullish the world markets are. The Ukraine war is killing sentiment at the moment and therefore institutions, companies etc are holding back investment. This was literally the last thing that we needed following a pandemic that had put the brakes on production of many things that are needed to make the world tick along as (what was) usual. This current government in the UK is absolutely shocking but I can't really blame them alone for the extent of what's going on at the moment. Many European countries are feeling the same pain due to energy/gas prices etc. This isn't isolated just to our crappy leadership.

My point is that if it turned out that Putin was ousted in the next week and replaced with a 'friendly' leader who turned the taps back on, sentiment in general, with the public and markets, would change dramatically. What would follow would be a nice bump in consumer spending etc as energy prices would be almost certainly coming down by a large percentage and the general public can't wait to spend every last available penny. Institutions would also feel more comfortable investing billions into whatever they want to invest in.
 
With car makers starting to slow down on production on petrol cars and increasing production on Hybrid and Electric cars I can see by 2028/29 no new petrol cars been made by the time the government ruling coming into place for 2030 and I’m sure there won’t be a time scale to scrap your petrol car for electric but car tax prices will be increased and also petrol prices been over £3 a litre by 2030 (£165) to fill my tank it will force me to neither get a electric car or just use it to work and back only.
This will have a knock on effect all around the uk as Holiday makers/day trippers won’t be going to theme parks or leisure attractions when you got to factor in petrol costs into the budget.
Even on a self catering holiday 4 years ago we ate lunch in a pub/restaurant then had tea/supper back at the holiday home. With prices going up so much in the past year we more than likely gonna eat breakfast at the caravan, take a picnic for lunch and buy drinks there then cook a dinner on the night for the 4 of us with the savings going on petrol to go out each day.
 
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