to question if the squeeze on living standards will not be temporary?

[bindud]

"British families are facing the biggest squeeze on living standards for 30 years as surging prices and tax rises take their toll."

"The Bank of England forecast a 2pc fall in incomes after tax this year – the worst since its records began in 1990. In 2023, they’re set to fall 0.5pc."

Apparently things will get better in 2023, but will they?

We have the frozen income tax bands, ageing population, & most likely more wage stagnation after a decade of it after the 08 crash.

Is life just going to be more & more expensive going forward for the vast majority of people? or am i being too pessimistic?

If it were just a UK problem you might be able to blame Brexit, but it isn't. Prices are going up all over Europe. According to this the UK is about in the middle of European inflation rates. Energy prices have shot up all over Europe. It's very lazy, if convenient, to blame everything bad on Brexit, but it's simply not true.

I think the point is Brexit has made everything ten times worse.

Everything

That's why it keeps getting mentioned. And that is why it will keep getting mentioned. Especially as we were told how being out of the EU allowed us to remove VAT from fuel (for example).

Incidentally, if you get your electricity from EDF (as many do) some of your bills will be going to subsidise our French neighbours

www.theguardian.com/business/2022/jan/14/france-edf-cap-household-energy-bills

(or to put it another way, where do you think they'll be getting the money to plug that hole ?)

Maybe blue passports burn better than red ones ? That would be a benefit of Brexit.

Last year we were told to go out and spend, to help the economy, eat out to help out etc. This year we won't have any money to spend it will all go on bills. So are we not worried about that bit of the economy anymore?

Everyone swallowed Thatcher's message that the national economy is just like a household budget and that's why we're screwed.

It set us up for a horrible time in the 90s and we are seeing the same now. The USA didn't escape from the great depression with Austerity. They followed a Keynesian model and invested in order to stimulate the economy. Unfortunately the labour party never manage to explain the need to borrow and spend to the electorate and the Tories have an open goal to say that their economic policies are unsustainable.

@Invasionofthegutsnatchers

Will people still have their eyelash extensions and nights out and keep buying new stuff? Possibly, on credit. Meanwhile demand for food banks will rocket. I feel sorry for the children in poverty

Well if they don't there will be lots of beauticians, publicans, bar staff and shop assistants claiming the dole.

I can't see things changing for the better any time soon if at all.

Interest rates should have gone up ages ago. They have been ridiculously low for far too long and enabled house prices to go up and up.

Food has been too cheap far too long. Some things, like chicken, were more expensive in the past than now. Food in other European countries is dearer than here.

One of the reasons food has been so cheap is because farmers are not paid adequately for the food they grow or animals they keep.

Unfortunately interest rates and food are going up just as energy bills are going up making everything worse.

The squeeze can't possibly be temporary. There is simply no easy fix to the massive damage that has been done to our economy by Brexit.

I am always bemused by people liking house prices going up, but not having the same feeling about the price hikes on food and fuel.

The prices of energy and food are only going up. Climate change is already impacting world harvests and leading to shortages or the bane of MN ‘too small potatoes’. Yields will reduce as the planet warms, pests will and already are do far better without harsg winters to kill them off. Our soils are degraded and lacking nutrients so reliant on fossil fuel based fertilisers. The transition to low carbon, which is essential, is going to maintain and increase high energy, food and goods prices as transport and production is reliant on fossil fuels (at present). It could be managed much better but there seems to be little political leadership on setting up things to manage and benefit from this change, so the feet dragging will mean poorly thought out reactive policies.

I would start thing about how to create a world where we provide as much of our own energy and food as we can, to weather what is to come - if you can afford solar or a veg garden, now is the time.

It’s all well and good being told not to ask employers for pay rises, but at some point employers are going to need to reduce profits for shareholders, consortiums and partners in order to pay people properly.

I’m all for cutting my cloth accordingly, but if the cloth I’m being given each month is getting smaller each time then something has to give.

Well if they don't there will be lots of beauticians, publicans, bar staff and shop assistants claiming the dole.

Sounds like an excellent case for scrapping the dole. Well completely scrapping, we started years ago.

There may not be a glut of cheap houses to buy but if the market is flooded with way more rental properties as in the scenario predicted by previous poster then rent prices will fall. Rent prices falling and landlords having to compete to make their properties appealing rather than anywhere that will rent to you and hasn't been taken before it even hits the market makes buy to let less of a money for nothing game and further impacts on the market.

Not everything is about owning property and that isn't the model that everything is based on in many countries. Rent being crazily expensive hits the economy massively when a generation of retirees who haven't been able to buy houses starts coming through. How much money can the state afford to pay into the profits of private property owners in the form of housing benefit? Where will all this one bedroom affordable property come from? There aren't residential home spaces to fill the gap and even if there were they're even more expensive.

We need to rethink accommodation massively somehow.

@SerendipityJane

Well if they don't there will be lots of beauticians, publicans, bar staff and shop assistants claiming the dole.

Sounds like an excellent case for scrapping the dole. Well completely scrapping, we started years ago.

So what? We throw people in the workhouse if their business is no longer profitable? Lovely

@PeeAche Don't feel guilty. Our weekly shop comes to about £130 for a family of 3. We don't buy fancy food and shop in Asda. But if we like to eat plenty of fresh fruit and vegetables, and cook with fresh meat or fish. That costs money.
I'm sure we could cut our bill to £75 if we only ever bought yellow stickered food or shopped at Aldi/Lidl/Farmfoods and only ever bought the cheapest ingredients. But we work full time in demanding jobs with variable hours, and just don't have time to go around multiple shops (as Aldi/Lidl never have everything we need) or to go at a specific time to get the reduced stuff. I'm also not prepared to live on frozen stuff from Farmfoods or Iceland (though I guess we would if we really had to).

Luckily we borrowed way under what we could have for our current house, so we have a bit of a cushion, but if we have another child we'll likely have to upsize. That does worry me, I think about it a lot.

Even Reece Mogg said pre Brexit that things would be more difficult for a few decades.

So what? We throw people in the workhouse if their business is no longer profitable? Lovely

That's where we're headed. Prove me wrong.

I remember the national problems of the 80s and the 90s recession and what we are facing now seems far worse. On top of that, we are also dealing with the financial consequences of Covid (people who have used savings to live when unable to work, businesses failing, paying for government spending) and Brexit all at the same time.

This is not just about sound-bites or political rhetoric- it's real people. My DH works in a school in a deprived area. In his school, over the last 2 years the number of pupils qualifying for Pupil Premium (paid for children from very low income families) has doubled. New requests for the school to refer families to the food bank are an almost daily occurrence. Many parents work on zero hours contacts in hospitality and have struggled to get work. They are now facing huge rises in energy bills and the cost of all essentials. Services to support families and safeguard the most vulnerable have had their funding cut. The impact on the mental health of these families, the health and welfare of the children and the outcome for the community as a whole will be felt for decades.

But Boris and his friends will come out of all this wealthier than ever and sadly I suspect are skilled enough to persuade people to continue voting for them.

I think people are thinking about this on too small a scale. There is a great shift taking place. Around the world, corporations are buying up farmland and private housing at a staggering rate. The era of conspicuous consumption is coming to a close, for a whole host of reasons, and so profit will be pursued through the control of rents and food instead.

As someone else has said, the best thing you can do, if you possibly can, is to buy a property and grow as much of your own food as you can.

I remember the national problems of the 80s and the 90s recession and what we are facing now seems far worse.

You don't know you're born.

I can remember the 3-day weeks and blackouts of the 1970s. Plus the permastrikes that left the dead unburied, the roads ungritted, the schools closed, and the rubbish piling high.

@Fallagain

Even Reece Mogg said pre Brexit that things would be more difficult for a few decades.

Rees-Mogg...

@MintJulia

Moving away from fossil fuels was always going to be painful. To achieve net zero, we have to consume less and that means everyone. If we are serious about it, then people need to re-evaluate, live to a lower standard. It isn't going to be popular, ever.

I agree completely. So many of us have got so used to having exactly what we want, when we want it, that the idea of 'consuming less' is really hard to fathom and it's an attitude that I see from ALL walks of life, not just 'rich' people or those on a middling income. I have friends on very low incomes who prefer to continually spend £10 on shit quality clothing from Boohoo that they wear once and chuck away (not even recycle) and then moan about never being able to save for anything because they're on a low wage.

Doing without much of the consumerist crap would make many people feel as though they're 'going without' or somehow living a lower standard of life - it's mental.

Sorry for the random message, I was trying to attach something and failed!

We won’t know the full economic consequences for a very long time,” he said. “The overwhelming opportunity for Brexit is over the next 50 years.”

So who do we think will benefit?

Telling lower income people to 'consume less' isn't really that helpful.

It would be far better for the wealthy elite owners of super yachts to consume less. Those things are awful and completely unnecessary.

“Notonthestairs

Fallagain
Even Reece Mogg said pre Brexit that things would be more difficult for a few decades.

Rees-Mogg...”

Apologies. I’m hoping pointing out this error made you feel better.

@MasterGland

I think people are thinking about this on too small a scale. There is a great shift taking place. Around the world, corporations are buying up farmland and private housing at a staggering rate. The era of conspicuous consumption is coming to a close, for a whole host of reasons, and so profit will be pursued through the control of rents and food instead.

As someone else has said, the best thing you can do, if you possibly can, is to buy a property and grow as much of your own food as you can.

I agree, and live without debt (mortgage aside for many of us) as far as possible. No consumer credit, bank loans, vehicle leases etc.

My priority is paying off my average amount of consumer credit debt as fast as possible. I also realise that this isn't as 'easy' for many others as it might be for me or anyone else, but living without debt is, I think, the single most important financial focus for me from here on in.

@ivykaty44

In 1990 the interest rate on my mortgage was 15% and it came down for a year to 11% Prices kept going up and house prices stalled for 7 years

Then change if government and university was promoted social mobility really promoted

As things changed people began to expect a different lifestyle, university, cars, meals out

Now that prices are rising, will people still be able to afford all those things?

I remember the 90s but also the 70s when as a young mum I'd be terrified of the gas and electric bills coming in. I can remember being lonely and I couldn't afford the bus fare to go and see my mum. I think it was 3p each way. How ridiculous does that sound. I also remember not being able to afford the prescription charge for the pill, not free back then, and having to walk to where my DH worked as he was getting paid that day so I could get the money off him. Now I'm regarded as a boomer who has always had it so easy.

Boom and bust isn't it.

I think people will adapt, well not much choice really, and then things will bottom out and change.