The rising cost of living – the squeeze is on

Whilst the UK economy has recovered remarkably well in terms of job creation and unemployment (4.1%) at below pre-pandemic levels, the value of the pound in our pockets looks set to subside throughout 2022.

The latest inflation data released on 19th January 2022 showed a further rise in the Consumer Price Index (“CPI”) to 5.4%.

The Retail Price Index, (“RPI”) pushed conveniently to the margins by Whitehall but more reflective of cost of living increases as it is the index which the cost of many goods and services are linked to (including trains, social housing rents and mobile phone tariffs) has increased to 7.5%. 

With average wage increases now running at 3.8%, using either index, Mr & Mrs “Average” are worse off. With house prices increasing by around 10% a year and second hand cars up around 27%, the “true cost of living” increase is nearer 10% for many families. All of which ignores the energy bill crisis, where conservatively increases will start at 50%.

Interest rates are set to increase throughout 2022. For those with variable rate mortgages, including trackers, this is yet another cost to bear, further widening the gap between net income and escalating outgoings.

“Squeezed middle”, “Just about managing”, whatever term you use, the financial squeeze is on.

© justchrisdavies 2022

Published by justchrisdavies

Happily married. Thatcherite Conservative, hawk, libertarian, meritocrat, patriot, free speech, free markets, abhor all identity politics, woke/cancel culture/Critical Race Theory. Privilege is not exclusively white. Proud of my country, and it’s history. Support our armed forces. Refuse to bow to revisionism. The Laffer Curve will set us free. Lower taxes = higher tax receipts @justchrisdavies on Twitter, GETTR and Parler. Support GBNews, Fellow of the Bow Group, Member of the Bruges Group.

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