Yesterday, Boris Johnson announced that he plans to end the covid-related restrictions in the UK a month early. In two weeks time, we could very well be facing a pre-covid United Kingdom, with no isolating and lateral flows. Whilst this is an incredibly positive step towards normality, the post-covid world will not be all as straight forward and rosy as you might think.
You have probably already seen, and been worried by, the impending energy price rises set to hit the UK in the coming months. Analysts are expecting a 50% rise in energy costs from April. Increased costs coupled with the UK inflation rate reaching the highest level in 30 years at 5.4% shows a very bleak financial outlook for the vast majority of people that are already struggling due to numerous covid related issues.
It’s not only the general population that are going to be negatively affected by the increase in energy prices. The business lobby group has warned the government that there is a ‘cost-of-doing-business crisis’, and asked the chancellor to help UK businesses. 3 in 4 UK firms are being forced to raise prices due to the increased costs, and 50% of the 1000 companies interviewed are looking to reduce costs where possible.
To put some tangible figures to these rises, Next has said that their prices will be rising by 6%, Tesco is warning of 5% increases in food by the spring, and Greggs (who recently announced a collaboration with Primark) have confirmed increases of between 5-10p per baked good. While these increases, and costs, might not seem too frightening from the outset, coupling these increases in cost-of-goods with the cost-of-living, the average UK person is due to be far worse off than prior to the pandemic.
With these increased costs across the whole of ‘normal’ life, you wouldn’t be wrong to think that you will need to get paid more at work to cover these increases. However, last week Andrew Bailey (the governor of the Bank of England) has told us to ‘not ask for a big pay rise’. Mr Bailey said that while it would be ‘painful’ for workers to accept that prices would rise faster than their wages, he added that some ‘moderation of wage rises’ was needed to prevent inflation becoming entrenched. Now, while the economic facts behind the statement may well be correct, I found this statement incredibly insulting. The UK will be faced with millions of households experiencing serious monetary issues, and will be struggling to put food on the plates of their families.
I must state I am not suggesting we all knock on our bosses door after reading this article to ask for pay rises that may not be warranted, this is a clear message that finding alternative streams of revenue are going to be how we, as UK citizens, can keep afloat in the ever rising levels of cost-of-living. A quick search on Google or YouTube will show you a plethora of ‘side hustles’ to help increase your streams of money.
With 500 out of 1000 businesses saying they’re looking to reduce spending, I can’t imagine a conversation with your boss going worse than asking for a pay rise while they’re looking to reduce spend. Looking at alternative ways of making money, and being smart about what you’re spending on is imperative if we are to navigate the treacherous post-covid waters.
The key takeaway here is that while you may have 2 years worth pent-up parties, holidays and spending to do, please don’t go contactless happy when you’re finally able to go out and do everything you’ve been craving to do for the whole of the pandemic. Effective money management is vital if we are to survive in the Inflation Nation.