Recession is here

[icelolly12]

With the rising prices, hiked interest rates, closures of shops now Wilko, plus in my area many local restaurants and cafes that had been open for years have recently announced they're having to close... I'm pretty sure we're in a recession and that it's going to get worse. Is anyone else feeling the same? Everybody in real life is acting as if everything is perfectly fine.

yes I think that's 30% (although the stats I've found are actually 28%) of households have a mortgage, compared to 30% of home owners.
Households are split into (unequal) thirds - largest third renting (privately and social housing), 2nd third owner occupiers who own their homes outright, smallest third owner occupiers with mortgage.

The percentage owned with mortgage has decreased since 2019 and the percentage fully owned has increased. I was surprised that so many people owned their own homes too though. I suppose it's linked to the older generation living longer and younger generation buying homes at a later age.

Because the silly bastard in charge of the BoE was of the verge of being found grossly incompetent as head of the FCA before the old boys club found him a new job.

Quite obviously to keep 'confidence' high and stop people panicking.

I think wilkos is closing because shopping habits have changed. You can get nearly everything they sell in the supermarket, the rest on Amazon. People aren’t going out of their way to go there anymore.

Wilko has stunned me.
I absolutely love wilko 😪

Wilko floors wipes, plastic hand gloves, gardening stuff... Stationary, hooks really cheap little hooks 3 for 6 which are amazing...

I'll miss it a great deal

I agree. Restaurants that have been in business for years are shutting around me. The housing market is like a frog being slowly boiled. It’s not going to be all at once but the change in interest rates will massively impact.

"you first mate you fat prick" 😁
We don't hear enough of this kind of phrasing on MN imo @tootallfortheshelf

I hope Wilko is saved.
But please explain anti social behaviour and litter on a recession. Can people not take their litter home?

Not bothered it's going tbh. Nothing special about the place

We’re not in a recession.
a good number of us are however up shit creek

the good-ish news is that even though our quality of life is likely to be further squeezed, lack of recession means a lot of businesses (not all) will continue to do well
and pay their staff.

I was dismayed to see about Wilko’s today. I went in last week and came away empty handed, they didn’t have what I went in for. Hope they can hang on.

But restaurants etc, nope, not around me (Midlands). It was DS’s girlfriend’s birthday last week. In his normal chaotic fashion he let me know Friday night they were free to go out on Saturday. I tried to book three restaurants ( fancier ones, it was a special birthday) for Saturday night but all three were fully booked. I then booked the local Wildwood and even that was rammed. A friend was telling me she went out for a meal mid week in Prezzo and it was full. Called in at a fancy tea room for an afternoon tea a couple of weeks ago, they only had one table available right by the door, otherwise fully booked. Great news for the restaurants, pain in the arse for those who live by the seat of their pants.

The vast majority have of us are poorer but the country is not in a recession. I think we might swerve one too.

Maybe not, but it's another load of job losses and yet another empty shop in the high street.

Wilkos stopped selling lottery tickets /scratch cards some time ago and i wondered if they were in trouble then. Past few times I've been in, they haven't even had sweets, it's gone form an aisle full to 2 shelves max in a tiny cupboard, doubt they even had 100 sweets to sell.
Was always good for paint and toiletries and I used to like a wander round in my lunch break when we were all office based. Now there's nothing much.

I think it is easy to forget that inflation falling does not mean prices are dropping. They will just rise less quick - but given that inflation is higher than wage increases, people will continue to have (significantly) less money.
People can be financially squeezed without a recession.
And even if interest rates do not go up much more it does not mean they will go down.
Also a lot of people do not feel the effect of interest rates yet as they are still in fixed rate deals.
It is at best naive to think that interest rates will decrease substantially.
Re inflation if there is 12% inflation and you are offered 4% wage increase, this is effectively a 8% cut in wages.
If inflation then goes down to 10% you have a significant drop in inflation but still a significant cut in wages.

GDP is likely propped up by the banking sector, who will undoubtedly see huge profits due to higher interest rates.

I'd also say that many people you see at expensive restaurants etc are either yet to feel the effect of rate increases or using credit cards/loans to maintain their lifestyle.

We've started to cut back (less eating out) and our financial position is comfortable.

Tell me about it, my job no longer exists and I'm redundant - haven't been out of work since I was 15, worked damn hard, had two babies and went back to work when they were 8 and 7 months old and lost so much time with them for a career. Only to be left with no job in a financial crisis. All those years paying into a system that has entirely let businesses down to a point where they cannot sustain staff. I am beyond stressed and I was already stressed when I was working about paying bills! It's horrendous.

Wilko is more a matter of poor management and poor stock control. It never really recovered from Covid. Ever since, in our local store, the shelves have been pretty sparse, lots of empty shelves, and lots of the basics/staples out of stock. I used to go in regularly, but don't bother anymore because every time I'd have to go elsewhere to get all the stuff that was out of stock. It reminds me of Woolworths as, likewise, it never moves with the times, no innovation of the product lines, etc.

I went out last week mid week for a special occassion and we went somewhere we normally wouldn't consider because it was way more expensive than we'd normally spend. It was packed.
However in the town where we live there are several empty units mainly from banks or bars/restaurants closing. There's a new Turkish barber opening soon though. (I'm not convinced we need another barbers)

From todays Monetary Policy report:

“Underlying quarterly GDP growth has been around 0.2% during the first half of this year. Bank staff expect a similar growth rate in the near term, reflecting more resilient household income and retail sales volumes, and most business surveys over recent months. Some more recent indicators show signs of weakening, however, including the July S&P Global/CIPS UK composite PMI.

The labour market remains tight but there are some indications that it is loosening. The LFS unemployment rate rose to 4.0% in the three months to May, somewhat higher than expected in the May Report, and the vacancies to unemployment ratio has continued to fall, although the latter still remains above historical averages.

Annual private sector regular pay growth increased to 7.7% in the three months to May, materially above expectations at the time of the May Report, and three-month on three-month growth in this measure of pay has picked up further. Earnings growth is nevertheless expected to decline in coming quarters, to around 6% by the end of this year, although there is uncertainty around this near-term outlook.”

GDP growth is still in positive territory, albeit only just, hence not in recession. The most important data to watch is labour market data. We currently have an incredibly tight labour market, unemployment is at historical lows, although rose very slightly in the last quarter from 3.8% to 4%. But if you look at the number of job vacancies, just over 1 million at the moment, the ratio of unemployed people to job vacancies is about 1.2 unemployed people per vacancy - by historical standards, this is incredibly low. Obviously pushing up wage inflation. When you add in public sector wage settlements which are coming through (quite rightly), at around 4-6%, wage inflation (as a whole) is likely to remain quite high compared to the last 10 years or so. What’s different at the moment, compared to 2007/8 is that there are, generally speaking, enough jobs to go round.

This is all on a macro level. Of course, many of those jobs won’t pay enough to cover people’s bills, particularly not when costs are outstripping wages, but, unless we see a huge spike in unemployment, it’s enough to keep us, just about, out of recession.

Home Bargains has the edge on Wilkos. What an emporium of delights it is. Plus, it sells those big, brick-like flapjacks- the ones that are about 10000 calories each and made almost entirely of hydrogenated fats, a few oats and two sultanas. Bloody lush.

We can’t know for sure if we’re in a recession or not as it’s measured retrospectively but along with PP I did notice the BofE saying today that they no longer expect one.

I just desperately hope that inflation gets under control.

It’s a tough path to tread. Keep inflation going down but don’t trigger recession

I agree with pp a strong labour market, whilst pushing wages up, does make me feel far better than high unemployment. I remember 2008 well

SiouxsieSiouxStiletto
According to gov.uk Repossessions are up for the first Quarter of the year by 23% and Orders for Possession by 36%. Details here.

The recession is here and it's diabolical.

Mortgage repossessions are still below the pre-covid 2019 baseline - from your link:
All Mortgage possession case types have been steadily increasing since Q2 2021 (apart from a small dip in Q4 2021 and Q4 2022). Claims, warrants and repossessions volumes are now at 34%, 45% and 45% below their pre-covid baseline. This is a significant increase when compared to the same quarters 2020 to 2022. However it is still short of the pre-covid 2019 baseline...

Historically, repossessions by county court bailiffs fell from a high of 9,284 in Q1 of 2009 to 934 in Q3 of 2018, the lowest recorded level of the series at the time. Following the complete cessation of repossession proceedings from March to September 2020 where no repossessions took place, the FCA guidance advised mortgage lenders not to commence or continue possession proceedings until April 2021 (unless there were special circumstances). As a result, there were only 10 repossessions from April 2020 to March 2021 (Q2 2020 to Q1 2021), this has now risen to 718 in January to March 2023.