To think a recession is looming?

[GrannyBloomers]

I was quoted £2 a litre for heating oil. £1000 for 500 litres, a matter of weeks ago it was roughly a quarter of the price.

Energy bills set to be £3k per annum - potentially more when a new price cap comes in in October.

Diesel near me is 171p and rising.

I'm in a 3 bed semi, nothing special. I need at least 1500 litres of oil a year (it runs the hot water too). That's say £3k. No gas but electric. I'm doing ok with cutting use = £1.5k per annum.

That's 4.5k at todays prices for household power. What will it be in October - 6k, 9k more?

This is before other costs increase - food will go up when the cost of storing it (refridgeration etc uses energy) and transport also increase.

If all the average person's income is spent on rent/mortgage/ bills and energy, then there's no money to spend on anything else. No eating out, no leisure, no holidays.

Surely a huge recession will follow.

And what if a much higher proportion of people need benefits?

@DenholmElliot

Yep! Time to batton down the hatches. For about the next 5 years I reakon

I'd agree with this timeline, the financial markets are cyclical, and ove time always follow the same pattern.

The next 5 years will be survival, then hopefully onto the upward side of increased wages, decreased costs etc

I worry about this too OP.

I agree user1497207191 . I think people are holding off having work done due to the extortionate costs for materials ATM too, hoping they'll settle down again. My labour charges have remained the same for the last few years (I probably should have upped them to match demand, but it didn't seem right), but materials have increased a lot generally and some I use have doubled. The quotes I am sending out now are significantly higher than pre-covid as a result.

Of course, all part of the great reset. You will own nothing and you will be happy.

I think it’s worse than 08-09 already. I think it will get worse than the 80s crash and recession.

I paid £340ish for 500 litres of oil a few weeks ago. Just tried to have a look for a quote to see if it had tripled for me too in such a short space. Both places I looked at said they couldn't quote me. One of those was boilerjuice.

I've seen threads in a Facebook group I'm in discussing the price of fuel at a popular service station near me. The expensive petrol was 1.97, but it is a service station on a motorway so obvs more than a supermarket.

2022 and the next few years will be interesting and not in a good way.

@Gonnagetgoing

Doesn't this mean that all the businesses which struggled through Covid and furloughed staff etc - so cafes, restaurants etc will put up prices?

I've got a new hairdresser who's lovely (my best so far!) and she opened her salon last autumn/winter, she won't want to put up her reasonable prices but she may have to! I could just about afford them. But the small independent organic grocer/greengrocer will have to put up prices etc.

I don't need a second job but surely if people want extra work, local cafes/restaurants where lots of the workers headed back to their own countries due to Brexit, well the work is there. Noticed at least 2-3 restaurants require extra staff.

Every business is different. Some will have received covid grants, some didn't. For some, the grants would have covered costs, for others, it wouldn't. Many businesses have had to take out loans just to survive and those loans need repaying (plus interest), others won't have needed to. So, basically, you can't generalise. Whether they put up prices depends on their costs, debt, and of course, whether they think their customers are able/willing to pay higher prices. What is certain that there'll continue to be a lot of movement in the small business market, many more will close, some will increase prices, some new businesses will start up. You really can't generalise.

I think so. We have had to massively tighten our belts. So far this year we have

-Downgraded cars

• Cancelled upcoming building work to home
• Stopped eating out and spending money at soft plays etc
• cancelled sky tv and expensive phone contracts.
• stopped wasting money on non essentials when shopping. Meal plans only.

-Stopped the weekly takeaway. -Decided not to go on holiday as we can’t afford it.

All of this type of thing has a knock on effect on businesses but if you can’t afford it what can you do.

@Gonnagetgoing

Doesn't this mean that all the businesses which struggled through Covid and furloughed staff etc - so cafes, restaurants etc will put up prices?

I've got a new hairdresser who's lovely (my best so far!) and she opened her salon last autumn/winter, she won't want to put up her reasonable prices but she may have to! I could just about afford them. But the small independent organic grocer/greengrocer will have to put up prices etc.

I don't need a second job but surely if people want extra work, local cafes/restaurants where lots of the workers headed back to their own countries due to Brexit, well the work is there. Noticed at least 2-3 restaurants require extra staff.

Cafes, hairdressers, etc will definitely put up prices if they feel they can. And I’ve noticed cafes round here already have. They will be seeing their food costs go up, their electric bills going up so will try to counter that.

But it’s a balancing act, put them up too much and people will stay away. Eat in, colour their own hair, etc.

And on top of this we all get a pay cut next month with the NI rise!

@OrangeBananaFish so does that mean you couldn’t currently buy oil if you wanted to? Scary! All those tankers getting turned away will be causing a shortage I guess.

I think there will be a recession, but which sectors of the economy may be affected is difficult to predict. After two years where some activities have been limited, which ones people choose to do less of or none may not be the usual response to a recession.

@DaisyTheUnicorn

This is worrying me. We aren't high income at all (I think they will have to "cut back" but be fine) and am genuinely quite worried. I think if fuel and food go up that will be enough to make things tricky for us. But obviously there is all the knock on effects too.

I don't really understand the economics of recession, but we "got through" the brexit price rises, then struggled through covid (but at least noone was going on holiday/eating out at times then) it will soon be a big rich/poor divide with those who can and those who can't. Sadly we will be struggling.

If you want to understand you should look at fiat currency and the debt-based system. No changes were made since 2008, so a crash is inevitable and when one came it would be a case of prolonging and masking for as long as possible by distractions and plunging as many sections of society into debt as humanly possible. There is an urgent need to reduce the population and replace cash. This is achieved with a social credit system akin to China's.

Going against the grain here but… no, we’re not heading for recession. If anything, we’re heading for a massive boom with inflation going up significantly. That doesn’t mean it’s fun - anyone around in the 90s will tell you high inflation is unsettling and difficult - but it’s definitely not a recession. Recession means decline in productivity and employment - we’re seeing the opposite. Employment is at an all time high, wages are rising fast. Arguably prices (house and energy in particular) are rising faster but that’s not a recession.

@QuebecBagnet I only looked at a couple of places. If I did more of a search possibly. I'm OK for the rest of this winter and most of summer now, but others might not be. It has worried me TBH.

@bluepeacock

Yes. Have a look at stagflation.

Covid cost billions and things were bad even before that. All this money spent on furlough etc has to be payed back somehow.

It's not just furlough though. There was also the cost of covid support grants, extra universal credit, bounce back loan defaults/fraud, loss of tax revenue from lower wages and lower business profits/sales, extra costs to pay the NHS increased costs (both covid related ie PPE, nightingales etc) plus paying overtime to staff and private hospitals to increase NHS capacity etc, plus more unemployment from those made redundant. It's hundreds of billions and there'll be residual costs (loan write offs, lower tax revenues, higher benefits) for years to come. Not to mention costs to continue subsidising the railways as passenger numbers are still a lot lower than pre-pandemic levels, yet costs remain the same as it's mostly fixed costs of infrastructure, rolling stock leasing, etc.

We'll be seeing more tax rises for the next few years and certainly no scope at all for any tax breaks.

Unfortunately, all that spending was necessary as it was the only thing that kept the economy functioning and we'd be even worse if even more businesses had closed down, more unemployment, less productivity, etc. And of course, what we did in the UK, was very similar to what most other developed countries did - maybe the detail of our covid support/costs were different, but generally, most developed economies pumped money into the system to prevent complete economic meltdown.

@QuebecBagnet

Property prices are also going to be affected by the fact that landlords soon won’t be able to rent out cheaper older terrace houses without spending quite a bit to improve their energy rating. On right move now such adverts say “this house may not be able to be rented out, etc, etc”. Will put people off.

Good! Some of the houses my DD and SiL viewed made my blood boil. Cheap carpets, dreadful kitchens, emulsion over the damp but not enough to cover the smell, ancient 1970s style storage radiators, wooden single glazed windows. Disgusting, unfit for habitation and would cost hundreds a month just to try and keep warm. This was rental properties, and the bloody landlords are bandits

@FudgeSundae

Going against the grain here but… no, we’re not heading for recession. If anything, we’re heading for a massive boom with inflation going up significantly. That doesn’t mean it’s fun - anyone around in the 90s will tell you high inflation is unsettling and difficult - but it’s definitely not a recession. Recession means decline in productivity and employment - we’re seeing the opposite. Employment is at an all time high, wages are rising fast. Arguably prices (house and energy in particular) are rising faster but that’s not a recession.

But it's all built on artificial money, i.e. the money pumped in, and still being pumped into the economy, paid for by printing money and borrowing. That's not sustainable.

Yes. It's coming. So many people I know aren't spending on anything non-essential at the moment. My (modest) disposable income is decreasing every month, and my friends are finding the same.

House prices in my area are obscene and this has got to be unsustainable? Eventually there just won't be anyone left who is willing and able to spend £400k-500k+ for a grotty one bedroom flat in a very unremarkable area, surely? Despite saving like mad for 10+ years, I've recently just given up on home ownership. Prices are shooting up too fast.

If you want to understand you should look at fiat currency and the debt-based system. No changes were made since 2008, so a crash is inevitable and when one came it would be a case of prolonging and masking for as long as possible by distractions and plunging as many sections of society into debt as humanly possible. There is an urgent need to reduce the population and replace cash. This is achieved with a social credit system akin to China's.
This is a really scary comment. Do you really want to live like China? Even excluding the many human rights issues, they are currently suffering the disastrous effects of their one child policy. The birth rate in this country is already low at 1.65, the only reason the population isn’t dropping is net immigration. The bit about no changes since 2008 is just incorrect, as anyone who has tried to get a mortgage in the last 15 years will tell you.

I’m hoping for a house price crash and for it to be harder for landlords to let properties . I worry about young people who are just starting out. They don’t stand a chance unless they have wealthy parents. A price crash would be beneficial to them.

I'm going to ask a dim question (sorry) but I don't understand how recessions work in relation to housing. does it affect current home owners or people hoping to buy/sell? We have a mortgage on our place, so does this mean our interest (payments) will go up? Slightly freaking out as we are obv feeling the energy increase already and are expecting another baby this year (timing is wonderful). I'd like to know what this all really means (as I save like a squirrel for any hope of a maternity leave)

Thank you ☺️

@Grapeflavour - agreed re house prices. I've been looking near where I live for a house for DB and his family to buy. Saw a nice one but it was horrendously overpriced and of course, hasn't sold since October last year. Contrast this to another friend who has a lovely house in a nice area but competitively priced, on the market last autumn didn't sell but she sold two weeks ago, for the asking price.

@crispmidnightpeace

Of course, all part of the great reset. You will own nothing and you will be happy.

Another day, another conspiracy

@user1497207191
But it's all built on artificial money, i.e. the money pumped in, and still being pumped into the economy, paid for by printing money and borrowing. That's not sustainable.
The evidence here is mixed, but at best it’s a matter of opinion. All those economists at the Bank of England aren’t deliberately screwing over the economy.

@Ionsion

I’m hoping for a house price crash and for it to be harder for landlords to let properties . I worry about young people who are just starting out. They don’t stand a chance unless they have wealthy parents. A price crash would be beneficial to them.

@lonsion - depends if you're a landlord with lots of BTLs (used to have lots of these on our books when I worked for a solicitor or if you're like DM who has one house that she rents out but it was a BTL.

DM charges a fair rent and looks after it. The income helps my DB out and also DM.