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.

That’s terrible. I could cry it’s just not ok

I run a foodbank so keep my eyes open for any local issues, not just national or central govt issues.

Yesterday I decided to check out the local rental market...and wish I hadn't :(

3/4 bed detached homes - £1500 pm
2/3 bed semi detached homes - £1000 - 1200 pm
2 bed apartments - £800 -1000 pm

How is this even remotely tenable?

It's clear the UK is already in recession but the BofE (as usual) is not reporting in a timely fashion.

If you can the best idea would be to start putting some money aside each month and consider your discretionary spending/re budget.

If you can't contact cap or stepchange now for help.

Trussell Trust foodbanks need a referral but they can tell you where to get one from.

I agree. It hasn’t hit most people yet. I think October onwards we are all going to notice if we haven’t already. Utilities will be going up again and we will all be wanting the heating on again. Food will have risen even more. Fixed rate mortgages will be coming to an end for some people. It’s not going to be fun.

The cost of living crisis won't be much more than an annoyance for a good percentage of the population. These people have a moan about increases but ultimately decide to take it on the chin and carry on maintaining a lifestyle they are accustomed to.

That's the thing about inequality, it isn't fair.

I don't really understand why the bills have to increase again in October when the energy companies are making such a profit

Perhaps we should all lobby our MPs to stop this

Don’t forget that some people downgrade making the ‘downgrade’ busier.

Our finances are healthy at the moment, but I have noticed that I’m saving a bit less as our costs increase.

This is nothing in comparison to heat/eat, just an example of how a squeeze affects everyone differently.

This is true, in 2008 everyone suddenly switched from Waitrose to Aldi for food supplies and places like B&M and Home Bargains did well.

Most of my friends are middle- to high income families (household income of £50k+). So they can afford an extra hundred pounds or so per month on the bills and still have enough left over for treats. Maybe they'll go on a slightly cheaper holiday or cancel some non essential subscriptions, but generally are fine.

Its the low income families, those on universal credit, single parent households etc. who are hardest hit.

I'm not well off but I earn above average and I'm cutting back
But do you need to cut back, i.e. you wouldn't be able to afford bills if you didn't? Or have you just chosen to because you think its sensible?

I don't remember the media driving the cost of living crisis back in 2008 quite like it is this time around. Maybe I'm wrong and it went by in that way that can when you have a new baby? I think, once mortgage rates steadied themselves it was less prominent , is that right?

Must be awful having to wait those extra 2 weeks for a haircut and not have your pedi’s.. which contradicts the fact you think it hasn’t had any effect yet as your already made a slight lifestyle change due to financial decision.

However, our mortgage offer expires in June, our house has been delayed until July - we sold our house and left in February we’ve been renting temporarily from a friend but we can’t stay here forever as it’s a house used for employees who take up a position on their farm. - With the cost of everything going up; we’re going to lose our house as we won’t be able to get the same mortgage offer. We’re holding out for an absolute miracle at this point.

We are seriously worried about being homeless, with a 2 year old and 5 week old. Albeit temporarily but the market is scarce of both rentable and homes for sale.. But nevertheless it’s scary, could be worse though, we just need to get on with it now.

Crazy isn't it! We pay around £750pm mortgage on a 3 bedroom terrace. The rent on a similar property in the same area is £1350pm

First - it is impacting people differently based on how much disposable income they already had.

Second - people priortize differently. For us for instance 3 things have been given priority and these are continuing unabated - 1) overpaying the mortgage 2) saving/investing and 3) DC's extra-curricular activities.

Things that have been cut are - 1) no haircuts at all - DC hair cut by grandma, mine growing long and luxurious, spouse shaves his head 2) barely any going out for meals - instead having people over 3) massive and drastic reduction in weekly groceries shifting to cooking entirely from scratch and stretching meat to much longer and veggie half the week 4) no purchases at all - unless sorely needed, and even then off marketplace/ebay/vinted.

This has really clawed back an amount big enough for us to realise how to live frugally, whilst overpaying mortgage and saving and no cutting any activities.

If we didn't have the income to match though - all of it would be forced to go.

@TwinklingFairyLights I was trying to think of an example, but you’ve explained it perfectly.

Also not all is as seems. In my youth a worked in a spot and sawdust pub for a bit.

At various times even though it was packed many older/elderly clientele were nursing a pint of lemonade and lime for 2/3 hrs.

They never bought food or anything, it was just social.

I'm cutting back because (for me) I think the increased costs of petrol, food and gas should come out of my discretionary spending, not out of my pension contributions, savings etc.

Must be awful having to wait those extra 2 weeks for a haircut and not have your pedi’s..

Sarcasm aside, that's what made me think. Do you actually need to cut back in this manner or do you have a kind of existential dread about it having read about it constantly over the last few months? Because the changes you have mentioned are fairly trivial but allow you to participate in the idea we are all being squeezed.

Oh I think they did
Remember the run on northen rock?

I think a lot of people will cut back on charitable giving. Food banks are seeing fewer donations. I fundraise for a charity and last year we had a raffle which raised over £200, this year only raised £70. A sponsored event similarly raised over £200 and currently our total sponsorship is at zero for this year (event is on Saturday).
Its an easy thing to cut back on because it doesn't actually affect you as an individual.

Maybe, like I say, perhaps it was the same wall to wall coverage and I missed it all in a blur of nappies and sleeplessness?

I don't recall the media driving it then either. I don't have the new baby excuse 😁.

What I remember from last time is a sudden drop in new job vacancies and a lot of people being made redundant, contractors having their contracts ended. I was in a permanent job but had been looking for a new one so I was speaking to a lot of recruitment consultants. Thankfully I wasn't made redundant but it did take me a year to find a new permanent role, whereas before then and since then, I've generally found a new role in a couple of months.

Yes.
Our donations have fallen off a cliff :(
My charitable giving will get the last thing I cut but it may be inevitable :(

If you look at the global poor, the situation is so dire - 97 percent of Afghanistan population in poverty, Egypt facing unrest as private sector bread prices increased 50 percent, state has introduced controls, Tunisia and Lebanon facing unrest due to prices - latest LRB article on global hunger as a cost of the Russian invasion of Ukraine very eye watering.

I agree people are having a summer fling in the knowledge we are facing a potentially dire winter.

We are in recession.
It's clear.
Which will mean tighter regs for mortgage borrowing, which will reduce the number pf people moving, which will reduce the number of properties for sale, which will mean LLs will increase rents if they are on VR mortgages.
It'll also mean contraction in manufacturing, retail and the jobs market.
Why can't the govt initiate a windfall tax on BP etc like other countries have?
oh that'll be because the ceos are huge tory donors
(Bitter)

Discretionary spending doesn't normally cover core budget items like food, heating etc.