Category Archives: UK cost of living crisis

Littler India: why Britain’s south Asian garment stores are struggling

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They have been resilient amid wider high street decline – but units are now emptying in areas such as Southall, west London

The south Asian high street is facing a fight for its future in Britain as customers scale back wedding celebrations because of the cost of living crisis and young people’s changing preferences.

Businesses in London and Manchester have said they have witnessed a huge decline in customers after the pandemic with the cost of living crisis prompting many to decide against the traditional big south Asian wedding and to seek out cheaper products online.

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‘It’s catastrophic’: Italian restaurants in London struggle to find staff post-Brexit

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UK hospitality industry hit by crisis as thousands of young Italians are forced out by latest round of rules and cost-of-living crisis

Emanuela Reccia has lived in London for almost a decade. She was a teenager when she left her home city of Naples to become a waitress in the UK, bringing her expertise and love of Italian cuisine to the capital.

But the 27-year-old, like thousands of other Italians working in the UK hospitality industry, now feels she has no option but to leave and return to Europe after the latest round of post-Brexit rules.

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Energy bills: standing charges are not standing still

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Despite a 12.3% cut in April’s energy price cap, there is an important fixed element in your bill that is rising again

“Great news! Your unit rates are going down.” E.ON’s letter to customers starts with glad tidings – but, as it soon admits, there is an element of their bills that is set to go up in most parts of the country.

Despite a headline cut of 12.3% in April’s energy price cap, yet again standing charges are rising. In E.ON’s case, on its Next Flex tariff, electricity charges are due to rise from 62.205p to 67.9041p – an increase of just over 9% – while for gas, charges go up from 29.595p to 31.894p (up almost 8%).

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Next cheers retail sector with bumper profits and talk of falling prices

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Shares hit new high as chain says consumer backdrop is improving and ‘feels like it is now entering a new era’

Next said the prices it charges customers are falling this year, as the fashion and homeware retailer reported bumper profits and said the UK consumer backdrop was improving.

Simon Wolfson, the group’s chief executive, said that it had been “a long time” since the group had started a financial year in such a positive frame of mind after the positive sales and growth results for the year to January.

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UK politics: Sunak refuses to say how abolition of national insurance would be funded – as it happened

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PM says ‘people trust me on these things’ and refuses to be drawn on whether government would forgo entire £46bn raised from measure

Keir Starmer has accused Jeremy Hunt of repeating the budget mistakes made by Liz Truss during her disastrous premiership.

In comments on the budget during a visit to a building site this morning, Starmer focused on Hunt’s proposal to abolish employees’ national insurance over time, saying that this was a bigger unfunded tax promise than those in Truss’s mini-budget. (See 9.28am.)

How humiliating was that for the government yesterday?

We’ve argued for years that they should get rid of the non-dom tax status, they’ve resisted that. And now, completely out of ideas, the only decent policy they’ve got is the one that they’ve lifted from us.

Nothing that Jeremy Hunt did yesterday, nor anything the OBR said, changes anything very significantly. Which is a shame. Because that means we are still:

-heading for a parliament in which people will on average be worse off at the end than at the start,

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UK petrol and diesel prices jump following Houthi attacks

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Petrol is up 3.2p a litre and diesel 4p a litre as fuel tankers are forced to avoid the Suez canal

The cost of filling up a family car in the UK increased by about £2 this month as the jump in the oil price caused by the Red Sea attacks is felt at the pumps.

In the three weeks to 18 February petrol increased by 3.2p to 143.4p a litre, while diesel rose by 4p to 152p, according to the RAC, which said this was “worrying” for motorists.

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UK savers should pick accounts beating rising cost of living while they can

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Many best rates are easy access and notice options rather than ones that lock money away

This week’s news that inflation stayed steady at 4% in January means it is still possible to put your money in a savings account with an interest rate that beats the rising cost of living.

Returns on fixed-rate savings accounts have been falling, but, so far, variable rate deals have remained unchanged.

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Bank of England governor dampens hopes of interest rate cut

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Andrew Bailey says cost of living had been higher than expected in December despite ‘encouraging’ inflation news

The Bank of England governor has doused hopes that better-than-expected inflation news last month will accelerate cuts in interest rates, stressing the need for further evidence of wage moderation before Threadneedle Street moves.

Appearing before the House of Lords economics committee on Wednesday, Andrew Bailey said it was “encouraging” that inflation had remained unchanged at 4% in January but the previous month’s figure for the cost of living had been higher than predicted.

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More than 11 million Britons have less than £1,000 in savings

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Resolution Foundation calls for auto-enrolment into saving schemes, as millions have no ‘rainy day’ fund

More than 11 million working-age people in Britain don’t have basic “rainy day” savings of at least £1,000, according to a report that warns that the poorest households are struggling to build up financial resilience amid the cost of living crisis.

The Resolution Foundation said people across Britain faced a “triple savings challenge” of insufficient savings, an inability to cope financially with major life events such as family breakdown, and inadequate retirement incomes.

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Private tenants in Scotland face ‘big rent rises and mass evictions’ from April

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Campaigners say renters served notices of increases of 30% to 60% in advance of cap and other emergency protections ending

Private tenants in Scotland are facing big rent rises and mass evictions as emergency protections expire at the end of next month, campaigners have warned.

The Scottish government has “in effect rubber-stamped rent increases from April”, says Ruth Gilbert, the national campaigns chair of the Scotland-wide tenants’ union Living Rent, while transitional measures are inadequate and confusing, leaving many unaware what their legal rights are.

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UK’s January sales failed to revive consumer spending, say retailers

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Sales growth slowed last month amid cost of living crisis, poor weather and rail strikes

The traditional January sales on the high street failed to inspire a revival in consumer spending last month, as households continued to cut back amid the cost of living crisis.

Britain’s largest retailers said sales growth slowed last month as higher living costs weighed heavily on consumers, while weather conditions and strikes on the transport network also hit spending.

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Savings passbooks popular as Britain turns to cash amid cost of living crisis

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While some banks and building societies scrap system, others report increase in usage by customers

While some banks are scrapping passbook savings accounts amid suggestions they are past their sell-by date, other providers have reported an increase in their usage as people turn to cash to help them manage the cost of living.

Newcastle building society said that in 2023 it issued about three times as many passbooks as it did in 2021, and that it is getting new customers on the back of decisions by rivals to axe them.

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UK banks expect sharp rise in defaults on unsecured debt

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Lenders forecast biggest quarterly increase in missed repayments on credit cards and loans since 2009

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Britain’s biggest high street lenders expect the sharpest rise in defaults on unsecured lending since 2009, according to a Bank of England survey, as households come under growing pressure amid the cost of living crisis.

The figures from Threadneedle Street show banks expect a marked rise in the number of people who fail to meet repayments on credit cards, loans and other forms of unsecured borrowing over the next three months.

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BT scraps above-inflation price rises for mobile and broadband customers

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UK’s mobile and broadband firms were accused of ‘greedflation’ last year by the Guardian

BT has become the first major telecoms company to scrap controversial above-inflation price rises for mobile and broadband customers – but not before pushing through a final increase this year.

The owner of mobile operator EE has moved to address the pressure on consumers from rising household costs during the cost of living crisis, after telecoms companies were criticised for increasing bills.

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Burberry issues profit warning as Christmas shoppers shun pricey trenchcoats

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British brand affected by continued slowdown in luxury demand during cost of living crisis

Burberry has warned that annual profits will be sharply lower than previously expected after consumers left its expensive trenchcoats, bags and scarves off their Christmas shopping lists.

The luxury British brand said trading had been affected by a continued slowdown in luxury demand after rises in the cost of living and increases to interest rates globally.

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UK shoppers spent £13.7bn on groceries in run-up to Christmas

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Consumers buy more items – including plenty of parsnips and sprouts – to beat last year’s spend by 7%

UK shoppers spent £13.7bn on groceries in the run-up to Christmas – 7% more than a year before – as they sought out bargains and switched to discounters to try to offset price inflation.

The number of items bought rose by 2% in December as prices climbed by 6.7%, according to analysts at Kantar, although that was down from 9.6% in November – making it the biggest monthly drop in inflation the data firm has ever recorded.

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Divorces delayed by cost of living crisis, research finds

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Financial pressures have led to postponement of 19% of divorces, involving 270,000 couples, Legal & General claims

The start of the new year is often boom time for divorce lawyers, but 2024 may be different as new research shows the cost of living crisis has delayed more than 270,000 couples from splitting.

Financial pressures delayed 19% of divorces, researchers at Legal & General found. The impact has been particularly pronounced since 2020, with income concerns, cost of living pressures and the price of divorce all cited as reasons to postpone the split.

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Britons cut back on dining out and buying clothes, Barclays reveals

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Annual card spending report says consumers are prioritising travel and nights out and buying value-range groceries amid cost of living crisis

Hard-pressed consumers cut back on eating out and buying new clothes to prioritise spending on travel, entertainment and a visit to the pub over the past year, as soaring inflation and rising bills sharply curtailed the rate of spending growth.

Consumer card spending increased by 4.1% year-on-year in 2023, almost two-thirds lower than the 10.6% rise in 2022, as the sharp increase in the cost of living took its toll on households.

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Two in three UK doctors suffer ‘moral distress’ due to overstretched NHS, study finds

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Exclusive: lack of resources to treat people whose ill health is often worsened by poverty is taking a heavy toll on medics’ wellbeing

Two in three UK doctors are suffering “moral distress” caused by the enfeebled state of the NHS and the damage the cost of living crisis is inflicting on patients’ health, research has found.

Large numbers are ending up psychologically damaged by feeling they cannot give patients the best possible care because of problems they cannot overcome, such as long waits for treatment or lack of drugs or the fact that poverty or bad housing is making them ill.

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Jeremy Hunt fuels election speculation as 6 March spring budget announced

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Chancellor has asked the OBR to prepare forecasts for the economy and public finances to be presented to parliament

Jeremy Hunt has announced that a spring budget expected to feature a host of tax cuts will be held on 6 March, fuelling speculation over an early general election.

While government sources insisted nothing should be read into the date, it is the earliest the set-piece fiscal event has been held in 13 years of Conservative government – apart from 2021 when the Treasury was trying to kickstart the economy after Covid.

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