The UK household debt is still rising

UK households have been experiencing the biggest financial contraction in decades due to the cost of living crisis. Rising levels of inflationRising gasoline prices and global volatility. While it is suggested that this will not last for decades, or very far in the next few years, it is having an increasingly negative impact on UK households and consumers.

As more people have less money to spend on essentials as well as luxury goods, with rising housing and daily prices, the UK economy is slowly beginning to see signs that a recession may be looming on the horizon.

At the same time, UK household debt as well as personal debt is on the rise, like personal loans and payday loans, have recovered somewhat in recent months. Because wages are not rising in line with inflation, which is expected to reach 11% by the end of 2022, the contraction of people’s finances is increasing.

Samuel Davis Commenting on this, he said: “The problem is that when you have a situation where taxes have risen, daily commodity prices are rising alarmingly fast and petrol prices are not showing a sign of decline, people have less money to spend on both. What they need and what they like. This, along with comprehensive inflation, where money is actually less valuable, makes it more likely that people will reign in their spending, which in itself will affect the wider economy.

Davis continued: “Remember, when you go shopping and buy something, you spend money on someone else. They will be taxed on their profits and of course, the more they sell, the more their profits will be. If they sell less and if there is less demand from consumers, it is likely that store profits will fall and as a result, their taxable profits will also fall, making the UK economy feel wider. ”

The Cost of Living Starting with a Bite

UK supermarkets have recently announced that they are noticing changes in the behavior of consumers and shoppers. Asda chairman Lord Rose recently Told the BBC: “What we see is a massive change in behavior…”

“People are trading back. They are worried about spending. ” It has been reported that some buyers in Asda had to return items to the shelves when their purchase price reached 30 30. There is such a contraction in the country’s finances that it has been reported that this is the case for both purchases and gasoline.

The Ukraine war is exacerbating global trade, with large quantities of wheat blocked in Ukraine, suggesting that food prices will rise, as well as inflation. This combination is aimed at compressing the pockets of millions of users in a way not experienced since the 1970s.

Lord Rose told the BBC: “I am the generation that remembers what it was like last time. And again [inflation] It catches, it is quite destructive … and it takes a long time to eliminate it … we are threatened with being in a place from which it is very difficult to escape. “

Samuel Davis Kallis said: “The problem with inflation is that it rises and falls very fast, but it is much slower on the decline. Therefore, people will have to be more careful with their spending and how they use and do not really use the money. “When inflation falls and starts to bite, interest rates open and the Bank of England now raises interest rates, further growth is expected in the coming months and years.”

The UK household debt is still rising

Source link The UK household debt is still rising

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