Cost of Living Crisis

[TwinklingFairyLights]

Is this not having much of an impact yet? I was in central Manchester on Friday and restaurants, pubs and bars were all full. I phoned to book a haircut and my hairdresser is fully booked for 2 weeks. I thought discretionary spending would be reducing by now but I can't see it.

I'm not cancelling haircuts and still going out for meals/ drinks/ theatre etc.

It's because a lot of this is hitting the very poorest. Meaning people who had next to nothing before anyway and couldn't afford to go out for coffee, dinners, lunching and hair cuts

It's the poorest who are struggling financially, not middle earners.

But those that are t the very poorest are still being hit by bigger bills for gas, food and petrol. The money that must be found to pay for those must mean that other things can't be bought. I'd assumed that most people (like me) would cut discretionary spending.

So for example, I'm getting my hair cut every 10 weeks instead of every 8. I've stopped getting pedicures and am doing them at home instead. I've cancelled a couple of subscriptions.

The people who've been hit hardest won't have been doing much of that anyway. Then the people who did have some spare money but not a lot, won't have done it that often for a reduction in their consumption level to be that noticeable.

For people who have more spare money who can do those things more often, the impact probably hasn't fully been felt yet. Our gas and electric DD hasn't gone up much, nowhere near as much as it needs to to fully cover our annual usage, especially if prices go up in the winter. Plus you have people still working at home so won't be using much petrol. Some people will be getting into debt to keep up with their normal levels of spending and might not notice until they can't pay their credit card bill.

Others might have cut down elsewhere, ie no or cheaper holidays, have reduced/stopped savings or overpaying the mortgage. Plus of course you still have people with enough money to carry on as normal such as the well off or young people who live with their parents, pay little or nothing towards bed and board and have hundreds of pounds a month to spend on whatever they like.

Plus if these places were operating at capacity, they continue to do so, they just turn away fewer people. It could take months or a year or two for demand to drop significantly.

But not getting hair cuts and buying coffees will mean that people lose their jobs.

It will, but people can't spend money they don't have, get into debt, or stop paying their basic living to spend on non-essentials.

Or if they did, it wouldn't be very wise and could have serious consequences (debt, ruined credit rating, repossession etc).

it’ll hit hardest next October when fuel goes up again and it’s winter, a lot of people have a buffer so it will not have impacted them yet, I think things will be very different this time next year.

Are you hoping we plunge into a deep recession OP?

Well yes. That's kind of my point.

I wondered if any posters worked in industries that are being hit by this. What I'm reading in the news and what I'm seeing in real life aren't matching up.

Mumsnet madness at it's best 😂

I’m seeing a lot if spending and activity around me but not sure re actual figures, which we will get at some point

everything seems packed but can’t be sure on actual figures

Exactly this. I don't see the general public cutting back at all.

At the moment people are enjoying the post covid-19 freedom.

We are at the very start of this crisis.
If the government doesn't intervene, we will see the real impact in 6- 12 months time...

DH works in retail and he says the shops are as busy as ever but that doesn't equate to money in the tills. Lots of people see browsing as a hobby and don't buy anything.

It will hit the middle income people. But autumn at the latest is my feeling.

I lot of people are still doing their planned stuff - birthday celebrations, holidays etc - I think this will tail off noticeably.

I just googled as a reminder but savings rose due to suppressed spending

higher for higher incomes

they thought furlough ending might cause unemployment to dampen that but that hasn’t happened

It will be skewed of course as some have saved more etc. here’s an older article

amp.theguardian.com/money/2021/jun/30/covid-savings-britain-built-up-second-highest-level-on-record-in-early-2021

I have found this too.
There is a lot on here about the cost of living crisis but in real life everywhere we go is so busy.
We went to IKEA in Milton Keynes a few weekends ago and it was the busiest I have ever seen it, we had to leave as I couldn't cope with how crowded it was. We then tried to have lunch out but all the restaurants were full with long waits for tables.
We went to the MK shopping centre this weekend and it was packed, i had booked lunch in advance this time but I had to ring several restaurants to find one with space for a family of 4 for lunch.
Some of my relatives live near Rushden Lakes and they say you can't go at the weekend as it is so busy you can't find a parking space.

At the moment people are enjoying the post covid-19 freedom

I wondered if this might be the case.

It's like the usual economic rules don't apply.

That's interesting, so are sales down?

When there was the recession in the early 80s, nights out were not cut back much. Those on lower incomes may have cancelled holidays, spent less on clothing, not bought a newer car, but still kept nights out.

I also think that the reasonably fine and dry weather may have an impact.

I drove into Manchester on Friday and the only traffic jam was the queues of cars by the Trafford Centre.

I think a lot of it at the moment will be put on credit cards so the impact wont be felt for a few months once the need to pay it back kicks in. People on lower budgets are used to cutting back and watching the pennies whilst those who have enjoyed a higher income for a number of years wont feel the effects for a while but will feel it more substansially i think when it does catch up with them.