To ask if rising living costs are ever going to come back down?

[clkim]

Just reading another thread about rising food costs and got me wondering, are prices ever actually going to come down? The future looks really depressing atm, we already struggled to keep our head above water but now it seems things are much worse. Our monthly food bill has gone up significantly, same with gas and electric and some weeks I struggle to even put petrol in my car.

What has actually caused these ridiculous price rises? Surely the government will have to step in sooner or later? It's 2022, we shouldn't be living like this!

The only thing that isn’t rising is my salary.

@mrziggycoco

Do you know what the debt-based economy is? Fiat currency? Hyperinflation?

Do you understand the implications of creating money from debt and what has to happen when there is more debt than there is cash to pay that debt?

Read this then, this is pretty simple.

We're at the end of a system that cannot last forever.
Basically when you take a loan out at the bank, say you take £10 out from the bank as a loan, that £10 was never there at the bank. It's lent out as fractional reserve, I think the BoE set the FR at something like three times over what they have in reserves, so now there is £15 to be paid back to the bank where no £15 existed before.

This is obviously a simplified example. The £5 is interest.

But the cash was not made at the same time as the debt, you have to work for the money to pay the debt, this locks you into work to serve the banks.

They lent and lent and lent, and the payback did not exist. Therefore what has to happen? More debt has to be created. This can't go on forever, right?

As for what happens upon crash, you probably don't want to envisage it.

What would the global bankers do when this was about to happen? Distract of course. Blame it on other things of course, like massive spending necessitated by some large event? A war? Anything but 'sorry folks, this is the end, societal collapse incoming'

This, ginifoundation.org/kb/fiat-currency-graveyard-a-history-of-monetary-folly/#:~:text=The%20Average%20Lifespan%20of%20a%20Fiat%20Currency%20is%20About%2035%20Years.&text=So%2C%20hyperinflation%20and%20currency%20collapses,frequently%20than%20many%20people%20realize.

I bet all those people who were peddling Project Fear feel a bit silly right now.

@DGRossetti

I bet all those people who were peddling Project Fear feel a bit silly right now.

Nah, they haven’t got enough self awareness.

@DGRossetti

I bet all those people who were peddling Project Fear feel a bit silly right now.

I voted Remain and project fear had no impact on me as I didn’t buy into it but if you had to break it down how much is the rise due to Ukraine war, pandemic, other v Brexit?

Most UK citizens were protected from rising energy costs last year by the Price Cap.

We dont have it, so last year our prices went up and up. Aware of this, by November I had built up a surplus that was 2 full months bills. It wasn't enough. Fortunately the price rises were mitigated by the £100 High Street Voucher and a £200 heating payment for those on Universal or Pension credit.

But still whole streets were in darkness by 9.30pm as people went to bed early. Households began to burn again as they couldn't afford to fill their oil tanks.

I hate to be the bearer of doom and gloom but I think this winter is going to be very hard for a lot of people.

Prices never go down.

[quote gonetogroundnow]@OnlyFoolsnMothers the answer is - a lot.

We sell live chickens into Moy Park for 55p - 75p per chicken. They sell onto supermarkets packaged and labelled for £2.24 - 2.71 and by the time it reaches the shelf in the supermarkets it's £5-7.

Someone is getting fat off the price rises and it sure as shit isn't the people producing it.

We do actually offer meat and veg boxes for sale locally - we charge more than our supermarket contract but significantly less than the customer would pay if they were buying from the supermarket.

The supermarkets are making an absolute fortune. Get savvy about where you shop and buy from your local veg man or farmer - less food miles and cheaper. [/quote]
Hi @gonetogroundnow are you in NI? I would be interested in how to buy direct from a farmer, do you go to any of the markets like St Georges?

I live in hope

It's not going to, inflation is predicted to peak at around 8% which economists think the USA has. If this is true it is likely sustainable as pay rises last year we're an average of 4.2% the same this year would take the sting out of inflation.

We are a family of 3 with me and DH working full time. We stopped at one because it was affordable for what we earn (didn't want to move careers) and our lifestyle. 4% doesn't really scare me as it will be counteracted by moving up pay scales or chasing promotion.

What I think will change is peoples attitudes and lifestyles. Two full time salaries will become the norm, going to uni to get professional jobs before kids will become the norm, minimum wage jobs will be something you do in your twenties.

We've built a society where we tell people everyone is equal and can do what they want. What this is bringing home is they can't, having kids on a below average salary isn't practical, anything but a middle income doesn't get you a holiday, buying down south isn't affordable to the masses.

It's going to be a rough few years but I hope we come out the other side with the drive to work hard to grow our country. We deserve our place the G7, but we are stuck in a rut! If we aren't careful other countries will steam past us like a Ferrari in the outside lane whilst we tundle along in our clapped out ford!

Cost of food was warned of long before the Russian war.

The UK has erected trade barriers to its nearest trading bloc.

The government has been kicking the can for full tariff and inspections on imported food stuffs down the road so the full impact is not yet felt.

It's not going to get better for the UK. I mean, prices are going up everywhere but ease of trade helps.

@vickyc90
It’s been this way for the last 30 years or more!

Well, interest rates (& therefore mortgages) have been extremely low for years, so home-owners have been doing extremely well. How do some of these people complaining about current prices going to cope when their mortgages go up to a more normal 8% or 10%? Taking the long view, history shows that periods of financial prosperity come and go, so the current financial climate is not at all unusual.

Petrol and energy prices will go down as some point and that will have a knock on effect. But even if costs fall, many businesses will carry on charging the same amount for goods...if they can get away with it.
The simple fact is that as poorer countries get wealthier, their demand for goods will rise and the toll on resources will grow. And that is only going to get more challenging. The UK has to get more independent on production of energy, probably nuclear, so that we are not at the mercy of global events.

[quote Alphabet1spaghetti2]@vickyc90
It’s been this way for the last 30 years or more![/quote]
Quite. Specifically in the last 12.

How’s it going to work with only doing minimum wage jobs in your 20s? Those jobs are the only ones available to some people for their entire lives. The whiff of ivory tower in that post is almost comical.

@MissBattleaxe

Prices were going upong before Ukraine was invaded. I fully blame the Tory government.

Four posts in and the Tory bashing starts. What could Labour (or anyone else) have done to stop the increases, given that most of the increases have come about due to things that are out of the hands of the Government?

@MyNameIsAngelicaSchuyler

But everyone knew what they were voting for!! The dream of post brexit Britain is finally here!!

To be fair, pretty much every economist predicted this before Brexit. That’s what led to Gove complaining about us having had enough of experts. It has been exacerbated by COVID, Ukraine, etc. but we knew in 2016 that was going to happen.

It's just bonkers isn't it?

I did a weekly food shop for my mum today. Absolutely nothing fancy, and it was £32. 3 years ago the same sort of shop would have been £25 max.
I've had to cut so many little treats, just because I can't justify/afford them any more. I used to have a weekly Saturday breakfast in Costas, £7 something. But now I've stopped, because I need that money for petrol.

If Labour get into power at the GE, they will not lower prices but blame the previous Government and the associated blame game will start 😳

They wonder why people don’t trust politicians of any colour 😾

@vickyc90

It's not going to, inflation is predicted to peak at around 8% which economists think the USA has. If this is true it is likely sustainable as pay rises last year we're an average of 4.2% the same this year would take the sting out of inflation.

We are a family of 3 with me and DH working full time. We stopped at one because it was affordable for what we earn (didn't want to move careers) and our lifestyle. 4% doesn't really scare me as it will be counteracted by moving up pay scales or chasing promotion.

What I think will change is peoples attitudes and lifestyles. Two full time salaries will become the norm, going to uni to get professional jobs before kids will become the norm, minimum wage jobs will be something you do in your twenties.

We've built a society where we tell people everyone is equal and can do what they want. What this is bringing home is they can't, having kids on a below average salary isn't practical, anything but a middle income doesn't get you a holiday, buying down south isn't affordable to the masses.

It's going to be a rough few years but I hope we come out the other side with the drive to work hard to grow our country. We deserve our place the G7, but we are stuck in a rut! If we aren't careful other countries will steam past us like a Ferrari in the outside lane whilst we tundle along in our clapped out ford!

The truth is that "middle class" is going to be a very much smaller than it has been perceived. You are, without the two income bit, describing a smaller professional middle class with assets and privileges - and then everyone else. Which is what I remember growing up in the 1970s and 1980s until the 2000s when apparently we all got "middle class".

I never believed that - it was just good old getting yourself in lots of debt to look like you had assets.

To be fair, pretty much every economist predicted this before Brexit. That’s what led to Gove complaining about us having had enough of experts. It has been exacerbated by COVID, Ukraine, etc. but we knew in 2016 that was going to happen.

I tried to find a good article breaking down factors but no luck yet

However if you look at global prices for say wheat, and it’s the same for other - nickel, gas etc - you can see huge rises post war.

A lot of what we need comes from Russia and Ukraine so it has been a global shock. Plus the pandemic had an impact.

I was concerned about Brexit, and didn’t vote for it, but a lot if what we are seeing globally is due to Ukraine war

It's not just the UK, I'm in the US and went food shopping with my husband last night and the prices were absolutely jaw-dropping. Outrageous to the point where it's bad you almost just have to laugh and say 'oh well' and just go without. $6.99 for a bag of Reece's pieces. Reece's is cheap-ass chocolate, nearly $10 a pack for that?! They are worth $1.50 at most. A box of butter was $7.99. Not even organic butter (so that's £6.20 for butter!). I'm not sure how much butter is in the UK these days but I bet it's not 6 quid.

Our rent went up by $500 too. Usually the rent increases are $50 or $100 or so. In our state there our no laws about max percentage raises, the landlords can raise as they see fit.

We were very comfortable and doing well until recently. Our household income is double the national average and even we are feeling squeezed and feeling that we should go without ordinary every day things. And don't even get me started on house prices now. I saw a house last night that wasn't even all that nice in a totally ordinary area with 2 bedrooms. $600k. That would have been $200K tops when I came to live here 8 years ago.

I was concerned about Brexit, and didn’t vote for it, but a lot if what we are seeing globally is due to Ukraine war.

Energy prices started to rocket last year, before the war in Ukraine. Here, we saw 3 massive increases in 2021, your Price Cap sheltered you from it. Putin's war is making the bad situation worse, but it's not the cause.

@TooBigForMyBoots

I was concerned about Brexit, and didn’t vote for it, but a lot if what we are seeing globally is due to Ukraine war.

Energy prices started to rocket last year, before the war in Ukraine. Here, we saw 3 massive increases in 2021, your Price Cap sheltered you from it. Putin's war is making the bad situation worse, but it's not the cause.

The pandemic also impacted prices before the war but it is hitting hard again due to it, so yes a major cause but not the only one.

This article is a good overview and is US based so shows more of a global outlook, not just U.K.

www.wsj.com/articles/how-wars-costs-reach-far-shoresto-american-farms-supermarkets-retailers-11646597823