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.

50 years not 5!

I've just had an invoice from my management company
I pay them £160pm. They have a deficit and expect me to pay £440 in 30 days and seemed surprised when I said actually I can't afford to
Don't think I'll be the only one! And I'm not a high earner

I see what you're saying. You have to remember though that for some people who live in relative poverty in this country find the meal out or the hair-do essential for their mental wellbeing.

When you live on practically nothing you need to be able to feel like you can treat yourself.

Also there are those of us who never visit the hairdresser, like myself. I dye my own hair and cut my own hair because I find a professional is not needed and therefore an extravagance.

Really people in poverty already live outside their means. If I'm low on cash it's buses not cabs, because I don't have much money and when I do I become lazy and generous. It's all quickly gone.

You seem to expect people to be very sensible but people aren't very sensible, and different things are essential for different reasons. That coffee on the way into work is what keeps some of us getting there.

I have cut down listening to news about the cost of living as it was dragging me down too much. I have a small business and need to manifest PMA in order to keep surviving.

news.sky.com/story/cost-of-living-bank-of-england-rate-setter-sees-inflation-higher-than-forecast-12609422

Not read the thread but agree with Ops point. Roads near me are as busy as ever, traffic on the motorways flies past. How are people not feeling the massive price hike?
Also lots of reports of people going without food etc. The reality I see in my supermarket is that people are still buying branded, doing big shops, buying unnecessary crap.
If it wasn’t on the news you’d never know about the crisis.

A lot of middle incomes didn't spend much in the covid years, we missed out on foreign holidays so still have that money now, we were also deprived of the things you mention OP so are many are making up for lost time. Going out and having to SD was not fun so many didn't and are going out now, that is probably why places are full

Difficult to say without knowing how it's all being paid for....

If its on a cc not so good.

If you see someone pay on a credit card it doesn't necessarily mean they have no money, we pay for everything by CC to collect the points/cashback and pay it back in full every month

Some people do that, yes.

Some don't

I think there is a huge divide & as pps said many have built up huge pandemic savings.

Yes some people did, certainly.
But not key workers who were working normally..
Or those without long expensive commutes..
Or those who only wfh for the first month or so (like my dh)..
I think - again - there is a huge divide in pandemic experience and expense.

It's far more nuanced than that. I'm a key worker who didnt wfh & worked throughout. I don't have a commute either. I still saved a huge amount by not having a life outside work.

I guess so...enforced lack of social opportunities?

Although I didn't seem to save any money ...online shopping saw to that ☺️

I guess the cost of living crisis will have its biggest impact as and when people start coming out of their fixed rate mortgage deals…… Especially those with large mortgages who were on fixed rate deals paying around 1% interest If the Bank of England keeps increasing the base rate as it has been doing (I think there’s another 4 or 5 reviews still left this year), they’ll be looking at 3-4% easily by the end of this year.

If it wasn’t in the news I’d feel like I was seeing a post pandemic bounce, lots of activity and spending

I guess so...enforced lack of social opportunities?

yep

no holidays
no wrap around/holiday childcare
no eating out
no days out
no hairdressers etc
no clothes
no petrol as didn't go anywhere

The only thing we bought was food.

"The household savings ratio (household savings as a proportion of household disposable income) increased from 8.9% in January-March 2020 to 25.9% in April-July 2020, a record high since the series began in 1987. This decreased to 14.3% in July-September 2020 as the economy opened up, and then increased again in October-December 2020 and January-March 2021 during lockdowns.
Total household debt was £1,892 billion in January-March 2021, only 2.4% more than the year before. Unsecured debt fell in each month between March 2020 and May 2021 in total, as many households reduced their spending and so were less likely to borrow."

I would argue that the people who saved more were the people who were still working. Furlough tended to be prevalent in industries that already don't pay well eg retail. Don't forget higher earners who were furloughed had their salaries capped.

Yes
80% of an already poor wage would be tricky

I agree that it hasn't shown itself yet and the rather lopsided impact the pandemic had has skewed things a bit.
The mainstream news is still referring to the crisis that we are facing later this year. I think a lot of people will be impacted. They just haven't been yet.
There will be some who are putting preparations in place. Others will be making hay while the sun still shines. Some will be impacted already but they probably won't be visible. Our local foodbank has been giving out more parcels recently, apparently.

Some have their heads in the sand, others are having sleepless nights.
What I've really noticed, because it's relevant to my family, is the shocking increase in rental costs, which just in no way reflect average wages.

Yes it’s almost like the news is sensationalist or has its own agenda somehow isn’t it? Very odd when the news doesn’t match up with reality 🤣

I don't think you can generalise on the financial impact of lockdowns.

Some people's costs didn't change if they were still travelling to work, and didn't normally spend a lot on eating out, leisure activities or hair/treatments etc. Or spending on these items was swapped for online shopping - there was a boom on things like toys and furniture for gardens.

Some people will have seen a big saving as they WFH so their income remained the same but they saved commuting costs and also couldn't spend on eating out, leisure activities or hair/treatments etc.

The furloughed weren't just low paid retail/leisure/hospitality workers but higher paid professionals like pilots who would have seen a big drop in income if their salary dropped to the furlough maximum. Anyone who's basic household bills (mortgage, car payments etc) needed more than the £2500 maximum to service could have got into trouble quite quickly if they didn't have savings (I read about a few of these and obviously its a lesson in not spending everything you earn or relying on being able to continue to earn at the same level). Other better paid people who might have seen a big impact of the pandemic would have been anyone who fell through the cracks in support for the self employed and maybe people like dentists who owned their practice as they could only do emergency work for a while and they saw big increases in costs of extra PPE, cleaning plus reduced patient capacity. Obviously we don't have to feel sorry for well paid people who have overstretched themselves but it doesn't change the fact that many would fall into this category.

@the80sweregreat
I agree - I live in the southwest and am not seeing signs of it slowing down (although on the other I have read that food bank use has increased).

There is very high demand for tradespeople of all kinds as well as cleaners. It’s impossible to get anyone quickly as they are booked for months. Cleaners have put their prices up quite substantially and are still being offered more work than they can take. Swimming teachers and driving instructors also have increased prices quite a lot but still have long waiting lists ( I can see people on the local FB page talking about the wait lists). People ate still spending away, more then ever it seems.

My husband is a garden landscaper and hasn’t stopped and is booked for months ahead - he can’t get labourers either as there isn’t anyone available. People are spending huge amounts on their gardens ( maybe this is a hangover from lockdown and focusing on home improvements?)

Also, when we went to the local carpet shop last week, we were told there is no fitting service for 8 weeks - the owner said he has never known anything like it in terms of how busy they have been lately. The estate agent who sold us our house last year is now working 7 days a week - as he selling from a massive new development where everything is selling off plan, before even publicly released, and he is trying to keep up with it all.

It’s also hard to get a takeaway most of the time in the evening, never mind a restaurant reservation, as they are so busy there is always a wait or they close early due to selling out. The prices are increasing a lot but demand isn’t falling.

The area I live in has become hugely popular with second home owners since the pandemic though, plus a lot of rental properties have been converted to Air b n b. I think that is pushing everything up.

I was brought up here and can’t see how it can all continue like this, it is scary watching house prices fly up, an average 3 bed here costs well over £100,000 more than it did pre-COVID, sometimes much more than that.

Locals are leaving as they can’t rent, because landlords are converting to Air B n B, and second home owners are prepared to spend so much more, and are here frequently on weekends now not just during summer.

My favourite cafe has just increased all food prices on menu by £2. When I realised that mushrooms on toast are now £12.50, I decided to stop going 😁 (‘wild mushrooms’ with fancy bread, but mushrooms on toast all the same).

That is one place that has seemed a lot quieter since then when I’ve walked past it during the week (and they always stacked out before) so there is a limit on how much people will pay for products, even when they are still spending money.

there is huge pent up demand as so many people didn't learn to drive or swim or build that extension.

We had our garden done during lockdown & paid a very good price as I guess people were still scared about the economy. Neighbour enquired with the same company & a lower spec was more expensive than what we paid & exact was at least 8k more

It’ll hit when winter hits. When interest rates go up again. When this years harvest comes in and we know just what we have despite fertiliser shortages, countries at war, countries banning exports, countries still under lockdown, countries just not able to plant or grow what they’ve used to.

oh and climate change. 🤷🏻‍♀️

Obviously we don't have to feel sorry for well paid people who have overstretched themselves but it doesn't change the fact that many would fall into this category.

I agree. As a keyworker I didn't feel bad that I was still working, I felt grateful that my job was relatively secure.