The economy and you March 2022

"The economy currently feel unpredictable and it's challenging to make plans and forecasts with such turbulence. Our business is growing, which we are grateful for, but costs are rising and some of our clients are having a rough time of it. Looking at the economy, it might be Spring but winter may well lie ahead rather than summer. What I'd love to remind Rishi is how it's impacting the small businesses and less wealthy individuals. 99% of the UK's companies are small businesses, so when he's making some hard but much needed decisions, he shouldn't be forgetting the 99% of businesses or bottom 99% of the population, as finances get people voting with their feet."

The economy is feeling like it is teetering on the brink right now. Everyone has less and the situation looks more and more unsustainable. Whereas we were all shocked at 5.4% inflation rates toward the end of 2021, we are now looking at inflation rates that are much higher and that are seemingly out of control. Credit card debt is at an all time high, and that’s a terrible indicator for the capacity of consumer spending. The only mercy we have right now as a nation is that we are coming out of winter just as energy prices have hiked up beyond what any household can reasonably be expected to afford. The recent cuts in fuel duty haven’t been passed on at the pumps, and Rishi Sunak would’ve been better advised to drop VAT on fuel as an alternative that would ensure the savings were passed onto consumers as expected. We’re on a long haul of economic misery!

"It feels very much like consumers are not spending at the moment as they don't know if fuel, energy and food prices are going to keep rising. As a result, they are cutting back on non-essentials. As a consumer I am doing this, so I understand, but for us at Better2Know we are seeing this too. I would ask Rishi to be very clear about what could happen with fuel prices in a worse-case scenario so that people can budget and plan. We are seeing increased calls for credit from our customers, who are individuals, which we were not seeing during the pandemic."

"I'm usually a glass half full type of person, so being pessimistic doesn't sit well with me, but that's how I feel. With inflation soaring to new heights, the powers that be seem unable, or unwilling, to step in. Instead they increase National Insurance contributions and tax for many and the Bank Of England increases interest rates. All well and good if Joe and Jane Public are out living it large and driving up inflation buying sports cars and quaffing champagne, but they're not. Inflation is from essentials like food, fuel, electricity and gas so raising rates won't have much if an impact. What it will do is put small businesses and households under even greater pressure just to keep the lights on, quite literally."

Psst, Rishi, a word in your ear my deluded man.... Disabled & Elderly people on benefits are more likely to buy from small local businesses and sole traders, because they get a personal service from a face they know and recognise and trust.. As you feel its important to ignore those most vulnerable in society, not only are you putting them into a very scary situation but also killing small businesses because they also from next month won't be able to make ends meet, will need to raise prices and inevitably lose customers, meaning they will possibly then either have to close or need Universal Credit to top up themselves.. Congratulations your level of ignorance to reality is outstanding. You probably need a "Will Smith" to wake you up....

"With the Bank of England predicting that 2022 will see the biggest squeeze on living standards since records began we are surely in for a rocky ride. For the middle-income earner, who until now may feel that financially they are stable, there will be a shock. As a money coach who talks to people all day about money and how they are managing, I find that many still have not clocked the impact of the energy price rise of 54% that will become apparent to all on Friday. However, many people ARE waking up to the fact that if they haven't managed their money much up until now, this is the time to start. At present, I find that they have wriggle room to absorb some of the rises that are on the way, but what happens when that wriggle room runs out? Financial wellbeing is so important but I know that I have run out of tools for many people who are already running on the tightest of budgets or in debt. The debt agencies are their next option. My prediction is that all will be well, eventually. It always is, but we are in for one hell of a ride for at least the next year. So it is belt and braces time for a huge number of us and the sooner we do it, the better."

The economy feels decidedly shaky although for us, at this present time business is booming - we have been inundated with enquiries and new clients. However, we are working in the field of training and consultancy in Equity, Diversity and Inclusivity which is a very relevant and critical area for businesses right now. That said, my optimism regarding new business is hugely dampened by the spiralling cost of living rises. This not only means we need to increase staff wages but fuels concerns on sustaining new and existing business as we watch our clients struggle with increasing overheads. What would I whisper in Rishi's ear? Nothing. I would shout. Loudly. "Stop tinkering around the edges. People are not just struggling, they are endangering themselves by starving themselves and living without heating. Why don't you try and live on an average salary for a week and then maybe you would take decisive action".