The Cost of Living Crisis
The current cost of living crisis needs no introduction. Everyone is feeling it. You go to the supermarket only to find essential like eggs and milk have soared in prices. Not to mention the dreaded rise in energy bills. Thing look pretty bleak to be honest. We’ve seen a really unfortunate set of circumstances in a very short space of time in the grand scheme of the world. Those being: Brexit, Covid-19 and the subsequent lockdowns, and rising cost of living which may or may not be a direct result of the Ukraine war.
Andy Clarke, the former chief executive of the supermarket chain Asda.: “We’re seeing inflation numbers at over double-digit. There’s nothing we can see in the near term that suggests it’s going to go south of that. If anything, it’s going to go up.”
It’s not only food prices that are astronomical. Mortgages are also predicted to rise to potentially unmanageable levels. This could lead to a huge surge in IVA’s and bankruptcies, and our Director Peter Murray predicts they could be at the highest level ever in the first quarter of 2023.
Construction Casualties
As people struggle to pay mortgages- we could also see a surplus of properties in the market due to lack of demand- bringing house prices crashing down. A good thing for prospective buyers. Every cloud!
While the biggest casualties could be mortgage payers, businesses are also undoubtedly suffering. This week it was reported that popular online furniture store Made.com has gone into administration. After their profits boomed during the Covid-19 lockdowns, this sadly did not continue through to this year, as many have been cutting back on non-essential spending.
This domino effect will also heavily affect the construction industry as potential renovations and building works could take a back seat in people’s spending priorities- especially with Christmas around the corner.
There is no easy answer to how to navigate the current cost of living crisis. The best thing to do is to save your funds and cut back on unnecessary purchases. As Black Friday and Christmas loom, expect to see a barrage of advertising and marketing from businesses as they desperately and understandably try to stay afloat. It’s the dilemma between protecting your own financial wellbeing but also trying not to fuel a recession. It’s a tight rope we are all balancing on right now…
If you are experiencing difficulties due to the cost of living crises, as always, Insolvency and Law are here to advise you on personal and business insolvency queries. For a free consultation; e-mail us now at info@insolvencyandlaw.co.uk or call us now at 020 7504 1300.