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That increased UK cost of living… January 13, 2022

Posted by WorldbyStorm in Uncategorized.
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Funny isn’t it, how events conspire to cause problems. I was reading about how…

Boris Johnson is facing increasing pressure from his own MPs, and from usually supportive newspapers, to take action over the cost of living crisis at the start of what could be another perilous week for the prime minister.

In a pair of front pages that will spook No 10, the Daily Mail and Daily Express led on Monday with calls from senior Conservatives for measures including an end to VAT being imposed on heating bills.

Also on Monday, one of the party’s perceived rising stars, the Tees Valley mayor, Ben Houchen, used an article in another Tory-friendly paper, the Times, to warn that voters in “red wall” seats would need tangible evidence of levelling up soon.

Which sent me to this in the Guardian which outlined the areas where costs are increasing dramatically:

Increases in rail fares, phone bills, national insurance and mortgage repayments have all been announced, and energy bills could rocket if wholesale gas prices remain high and the government resists pressure to act. It will be a particular disaster for those on fixed incomes and benefits but even those on generous incomes are going to feel the heat. The next four months are crucial. Here’s what is heading your way.

 

And that led on to this which outlined some of the reasons.

New figures published on Wednesday reveal the cost of living rose by 5.1% in the 12 months to November, its highest rate in 10 years.

The jump, driven largely by rising fuel and energy costs, puts further pressure on households across the UK.

Why are prices rising?

There are a number of reasons:

  • Demand for oil and gas is pushing up energy prices worldwide. This means higher bills for householders, and for businesses, many of whom will pass on some or all of the extra energy costs to their customers
  • Shortages of many goods, including building materials and computer chips, are causing supply problems and pushing up prices
  • Government support to businesses during the pandemic – like reduced VAT for hospitality – has ended
  • Businesses are struggling to recruit lorry drivers and hospitality staff. This is partly due to the pandemic, but is also compounded by Brexit, according to international policy forum the OECD.

Any of those singly would be a problem for any government, but collectively they make for a perfect storm, don’t they? And one in particular appears – broadly speaking, to be self-inflicted.

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