Chance of a recession

[gosensk]

AIBU to ask if it's unavoidable or (hopefully) unlikely?

Just feeling a bit panicked by the costs of everything & the tax hikes.

Just me then 😆

Inevitable I think, inflation rising, cost of fuel, utilities, massive debt from Covid. May even be a depression rather than a recession. I have seen recessions in the early 90’s and 2008. Once lending becomes difficult to obtain it effects everything. Consumers have been so used to borrowing cheap money, as interest rates rise, this will disappear. Already lots of mortgage products have been withdrawn by lenders. A few difficult years on the horizon I expect.

Sadly, I think it is inevitable. Greatly increased cost of living will mean that people have far less disposable income, if any at all, so will spend less on what they deem to be luxuries (what falls into that category will be different for everyone and there's nothing wrong with that). The knock on effect could mean a very serious recession indeed.

God, I sound so doom and gloom! It is the reality though.

Recessions do tend to be cyclical though, so it was always inevitable and it’s unsurprising it’s happened at this point.

Ok that's depressing. I started work in 07 so had the wage stagnation for most of my working life!

The knock on effect could mean a very serious recession indeed.

One of the legacies of 08 was the widening gap between the rich & the rest. So I assume some will be insulated from it.

Technically not, given the definition of a recession, as we effectively had one caused by the pandemic. The economy may grow very slowly (forecast only 1.8% this year) but it is still growth.

I agree some will be insulated from it, some others able to cope without too much difficulty.

The real risk is stagflation

Yes it's worrying, especially for the leisure sector.

Their costs have increased, especially for something like a restaurant. NMW, ingredients, utilities, fuel, all increased, so they have to increase their prices to make a profit and a living for the owners if a small business.

But many many people are seeing a squeeze on disposable income which means people can afford fewer of these ever more costly restaurant meals. Which means the restaurants don't cover their costs, let alone make a profit.

Plus as well as the independents that might not survive, some of the big chains are propped up by enormous amounts of debt and if they don't keep bringing in money and/or the debt gets more expensive due to higher interest rates, their house of cards all comes tumbling down.