Decline in our standard of living, when will it stop?

ruggedtoast

I woke up to the joyous news this morning, that petrol prices were about to breach record highs. Indeed since the last time I filled up I have found myself glancing disbelievingly at how rapidly the forecourt prices have started nudging £1.40 for unleaded.

Whereas not that long ago fuel price rises led to protests and barricades, people just seem to accept them now with weary resignation.

Another turn of the screw I sigh, a bit more of our middle class life falls to the coastal erosion of price inflation, cuts, and wage freezes, crashing into a sea which seems much closer to our door now than it did a few years ago. Lost forever?

I pretty much only do essential drives now anyway, have to look into that car sharing scheme again at work.

The day before yesterday we got a nice letter from the government informing us that we no longer qualify for the £40 a month working tax credit we used to get, nothing has changed apart from the ever spiralling prices at the supermarket.

That decision was taken in 2010, back when £30k a year was still, just about, a "good wage". I remember how pleased I was with myself when I broke the £30k barrier, doesn't seem that long ago, now I see myself referred to in the press as a "low earner". I know plenty of people on less.

Fair enough, the country is too broke for handouts isn't it? I only have to earn an extra £700 a year gross to make that back. I'll send an email to HR as they seem to have forgotten my pay increment this year, and last year.

At least nothing expensive has gone wrong with the car, apart from a broken headlight bulb. The last time this happened Halford's charged me £6 for the bulb and £4 for fitting. Now they want £10 for the same bulb and "£6.99 sir" for the fitting.

Preposterous I bluster, and spend 20 minutes in the darkening carpark, peering into the gloom while I bruise my hand in 20 different places failing to change the bulb.

Admitting defeat I drive to my father in law's house nearby, who unscrews some items from the engine compartment to allow room to work, and changes the bulb for me.

He's nearing retirement, and is rather glum about it. They had planned for their house to be their pension, and seem to have already spent a fair chunk of it on holidays and motor homes.

Three estate agent valuations recently, the highest was £45k less than the value they were given in the boom. Nevertheless even the lowest value puts it far beyond the wildest dreams of most middle income young families in the area, families like they used to be.

He has his own small business in the building trade, most of my wife's family do. Retiring on his state pension in a few months he's given up trying to chase the dwindling pool of building work, ferociously contested by younger, hungrier, often Eastern European suppliers, and has signed on for the very first time in his life.

When he started out he would go to to the council and harvest the addresses of people with pending planning applications, then write to them with quotes, they've gone back to it from time to time.

Two years ago, there were 30 pages of applications. Now there are barely a dozen applications, all for minor changes like windows. His son, my brother in law, may not be able to keep going.

The building trade in the South East, sighs my FIL as he tests the bulb, is pretty much dead.

I wonder if I should have bought that two pack of bulbs, the other side will go in another year, goodness knows what Halfords will charge for it then, and whether I'll still be able to afford to run a car to put it in.

vivatifosi

I don't think the economy is going to turn around anytime soon Rugged. We will get periodic good news re industries picking up and figures being better than usual, but this will need to be tempered with what's going on in Europe and how long that is going to take to steady. My sense is that we will be in a long period of bumping along the bottom.

My family are also in the building trade and I think its all down to how you handle it. My dad, who ought to be retired by now but still works, is an excellent networker and gets a ton of word of mouth business. He's also very good at spotting gaps in the market locally and working on them. My brother also runs his own building company and his standard of work is exceptional, he does a lot of very high-end stuff, but he does suffer from not having the same skills as dad in terms of getting out there and knowing people. It certainly isn't easy but I think that competent builders will struggle on price without networking as people are looking to undercut.

ILW

And BoE seems to think that inflation is not much of a problem.

MrRee_2

Well, speaking for the Winners ..... my standard of living gets better with every month that passes and each monthly lump sum I stash away as I simply cannot spend it - I have what I need, see?

ruggedtoast

ILW wrote: »

And BoE seems to think that inflation is not much of a problem.

It isn't a problem for them, no.

CRASH_BANG_WALLOP

its getting tougher for dudes out there and this is going to stay for years to come. todays announcement that fuel has reached its highest peak in years isnt going to help. fuel up=goods up

chewmylegoff

MrRee wrote: »

Well, speaking for the Winners ..... my standard of living gets better with every month that passes and each monthly lump sum I stash away as I simply cannot spend it - I have what I need, see?

of course you can't spend it, the shops don't accept money that you have made up on the internet.

StevieJ

ruggedtoast wrote: »

I woke up to the joyous news this morning, that petrol prices were about to breach record highs. Indeed since the last time I filled up I have found myself glancing disbelievingly at how rapidly the forecourt prices have started nudging £1.40 for unleaded.

Whereas not that long ago fuel price rises led to protests and barricades, people just seem to accept them now with weary resignation.

Funnily enough there is a headline in the current Chester freebie paper

'We won't give up vow fuel protesters'

http://edition.pagesuite-professional.co.uk/launch.aspx?referral=other&refresh=Xi71t90Z0B8q&PBID=df12ef58-1026-4dbb-b727-8fdc713b0552&skip=

kabayiri

It's very difficult to accurately predict economic progress in the short term, but I reckon we can gauge the risks to the economy and the impact each may have.

To me these are :-
- middle East instability and it's effect on Oil. This is a big one and outside our control for the most part.
- recession in Europe restricting our export markets
- Central European recession heralding increased migration to Britain. If I were struggling in a European economy like Poland, why shouldn't I look to try and make a living in UK ? Oversupply in the labour market will push wages down.
- US defferal of their problems to 2013/2014. They have artificially stimulated their economy to create jobs growth. Dealing with the costs of this action will prove tough. When the US sneezes...
- the Eurozone financial crisis. Again, deferred, not gone away.

Eeps, does anyone here own a bunker ?

Generali

The trouble is, the money has already been spent both by the Government and by individuals: if you borrow to consume then you move consumption from tomorrow to today. We've had the period of raised consumption, now we have the period of reduced consumption.

Borrowing to invest so to increase productive capacity is different as, with luck, you will get a return greater than the cost of borrowing. Spending on salaries for nurses, doctors and target measurers is doubtless highly laudable. Investment it is not however.

Percy1983

Luckily for me I get free public transport and use that for work.

With that I am heading for a third year of pay freezes.

Good news my business is doing well, not in a massive profit but already cleared my setup costs, so a bit more for me and and the government gets its cut too.