Will the cost of living go down?

[Thingsthatgo]

I know that no one can know for sure, but I just wondered if the current state of affairs is a short/medium term problem, or the new normal? Things are tight for us, but we are managing. It's not much fun, but not completely awful (yet!). We can cope, but I really don't want to be doing this indefinitely... is there an end to it at some point in the future, do you think?

Petrol seems to have dropped 10p per litre here so I guess it's possible. Who knows?

I don’t think prices will fall but wages will eventually catch up a bit. Our wages have fallen so so much since Brexit, if you compare us w other countries tho - our money/work buys us way less than it did. And that’s not going to be easy to change.

I think prices will not drop, we will get used to this being the new normal, then they will rise more.
The war in Ukraine doesn’t look like ending any time soon, the energy prices have yet to go up again, covid will make a come back in flu season, and flu will be back to normal levels or higher this year.

Wages have not fallen since Brexit. Wages have risen. However, inflation has risen by more than inflation so in real terms salaries have decreased in purchasing power.

People are obsessed with Brexit being the cause of all evil. It’s weird.

My guess (and it is purely a guess), is that the actually number of ££ we pay will stay about the same or start to rise more slowly but gradually pay rises will outstrip it, so bassic essentials become a smaller proportion of peoples income. More guessing but I think things will be tight for the next 5 years then slowly improve over the 5-10 years after that.

A lot has to do with fuel prices which impact so much, so if that drops it will help.

I was heartened to hear wheat is being released from Ukraine which has meant the price has dropped markedly, although probably better for poorer countries who faced a food catastrophe.

How long it lasts also depends on external factors which are hard to gauge

I don't think so as we have an ageing population issue on the horizon that hasn't been planned for. Higher wages will just push up prices & there hasn't been any investment in the last decade or so. We need to be more productive but that can't happen without investment

wages have been deflated since 08 & the QE

I think the cost of fuel will come down, but everything else will stay the same. Utility companies will cash in on the ridiculous OFGEM caps and I can't see a hope on hell of OFGEM bringing them down.

Food may drop a bit, interest rates will level off but probably not back to where they were.

Wages will rise, but slowly & not enough to put us "back in the black" with a cost of living vs wage levels state. We will all remain poorer, except that top 1%.

We will all remain poorer, except that top 1%.

yep

My wage has not risen, I’ve not had a pay rise since I can’t remember when.

there have been cost of living crises since time began. These things are often cyclical. While the cost of buying doesn’t necessarily come dwn, wages do increase to accommodate. And no, Brexit is not to blame here, the whole of the world is in crisis it’s just how they deal with it that changes.

In countries where people will always tell you that the government are doing x y and z to combat cost of living issues there is generally a far higher tax rate so it’s generally swings and roundabouts. It’s just that we choose to believe that the UK is the only country in the world who appears to be struggling when that is far from the case.

Err. Covid is back but everyone is pretending it hasn't.

10/6/22 Deaths 291, hospitalisations 3,637

Latest 20/7/22 Deaths 908, hospitalisations 12,038

So deaths and hospitalisations risen by three times in just a month!

But what do people expect when they can't be arsed to take even simple/basic precautions! No one cares anymore, not even bothering to keep distance when it's perfectly easy to do so (i.e. crowding around you in a virtually empty supermarket or sitting in the chair next to you in an otherwise empty waiting room!). People have VERY short memories and it's coming back to bite us all on the arse!

Staff shortages are a real thing again with staff off with covid. I've had 2 medical appointments cancelled in the last couple of weeks because the doctor/nurse were off with covid and they had no covid as other staff were also off with it.

So, yes, covid is going to continue impacting on the manufacture and supply of goods/services which will, again, feed into inflation simply due to the lack of supply and excess demand pushing prices up!

I read yesterday that the dwp are planning to increase benefit payments by a 'significant' amount to bring them in line with the rise in cost of living. Won't hold my breath for that one though.

I was pleased with the recent news about grain exports. That’ll help.

I’m also thinking that Truss/Sunak will be all over it after September. Not because they care greatly about ordinary folks, but because they will need the red wall and floating voters in 2024. That said, I’m hoping that Labour become more robust in opposition otherwise the incentive to “do something” will not be present for the Tories.

they might well "do something" short term like tax cuts that sound good and appeal to voters, but that actually make things worse with higher interest rates, causing huge increases in mortgages, cuts in public services which mean people end up spending more of their own money trying to pay for allied health care or education, and lots of other things that mean individual cost of living does go up, despite tax cuts.

Brexit certainly hasn't helped!

Rishi doesn't seem to understand economics.

He is obsessed with tax cuts or handouts, i.e. throwing covid support around randomly, the current rates/power grants, etc. That's just pumping money into the economy which helps drive demand-led inflation, i.e. more money in peoples' pockets facilitates prices rises because people can pay it! But of course, it makes people like him!!!

Inflation is being caused more by supply cost, i.e. increases in raw materials, increasing transport costs, increasing factory overheads (power) etc. Giving DIRECTED tax cuts could help alleviate this without pumping money into the economy driving inflation. Cuts in fuel taxes/duties and cuts in power taxes/levies would directly reduce the costs of businesses and households without driving inflation through supply costs.

He could reduce VAT on fuel, he could reduce VAT on power. We're out of the EU now, he's got no one who can block that kind of directed/limited VAT reductions. Duties and levies are also well within his power to reduce. What we don't want is a general VAT reduction on everything which would stoke inflation by increasing demand (due to more money in the economy).

That's the answer - a tax cut that reduces specific costs rather than throwing money at people pumping cash into the economy which increases inflation.

Rishi can't grasp the difference (or chooses to pretend he can't!).

Lots of EU countries have similar or even higher levels of inflation.

Brexit has had minimal impact on inflation, if any at all. Lots of other "nasty" things going on at the moment, such as Covid, international supply chain issues, chinese factory lockdowns, Ukraine, and an idiotic ex Chancellor who threw money around like confetti when it suited him!

I find it very strange that people are so blinkered that they think every last problem is caused by Brexit and can't see that we in the UK are suffering the same problems as most of Europe, America, and even the Far East and Australia!

Yes to this, so much going on right now, all that handing out money was getting stressful to watch

And the things countries face are bad but even worse are countries who have a food crisis due to Ukraine war (hopefully averted)

Easy

pound down
legislation paper work and costs up and we still haven’t implemented the next part full inbound checks which will cause more chaos.

reduction in eu workers

32bn reduction in trade.

lots of the effects hidden by pandemic and being able to blame Ukraine.

add to that government with no Will to help the people or small and just support big business.

i don’t see the cost of living coming down not for a good few years.

"Brexit has had minimal impact on inflation, if any at all"

This is total rubbish.

The value of the pound fell sharply on the result of the Brexit vote and has continued to decline versus other currencies, particularly as the economic damage and governmental instability it has caused has become more and more apparent

This has made the value of all imports including crude oil more expensive

"Rishi doesn't seem to understand economics"

Strange things to say about someone who worked at Goldman Sachs and a hedge fund...

@user1497207191 I don't understand your argument. Me saying Brexit hasn't helped us doesn't mean no other country is experiencing inflation.

who threw money around like confetti when it suited him!

I also never understand this point. Of course excess money has resulted in inflation but do you think people should not have been paid whilst simultaneously not being able to work?

One of the big issues we have is a tight labour market which has been impacted by Brexit. Also it's slowing business down & impacting trade. I don't understand people who are so blinkered that they can't see any negative impact. It's incredibly rare for something to only have positives!

The economics of international business and millionaires is VERY different from the economics of personal and household finances. There'll be VERY few low/middle earners who have accounts/investments with Goldman Sachs!

Now if he'd had a career in community credit unions or the citizens advice bureau, I think he'd have a much better understanding of "normal" people and their economics!