Are we entering the biggest recession since the 1930s ?

[Karimbo]

I hope we can avoid it, it's not 100% dead cert. So there is a possibility we can avoid it. Ultimately recessions happen when consumers are holding onto their pennies and not spending, it depends if consumers are resilient enough to keep spending or cave in.

In the UK we are a little bit more pre-disposed to this effect due to very high housing costs, a small disposable income.

 

[Newchodge]

I hope we can avoid it, it's not 100% dead cert. So there is a possibility we can avoid it. Ultimately recessions happen when consumers are holding onto their pennies and not spending, it depends if consumers are resilient enough to keep spending or cave in.

In the UK we are a little bit more pre-disposed to this effect due to very high housing costs, a small disposable income.

I think you are ignoring the large and increasing number of households who have few pennies to hold on to.

 

[Karimbo]

I think you are ignoring the large and increasing number of households who have few pennies to hold on to.

There were always people living like that from paycheck to paycheck.

I know people in £80K plus jobs who moan about never having enough money. Everyone seems to increase their spending to match their income. They buy a house with the maximum amount of mortgage they can get and then when there are economic shocks - they are suddenly in a crisis.

 

[UKSBD]

The bad thing at the moment is the people appear to be doing the moaning are the ones with household incomes between £18 and £40k

They are shouting for 10% rises and £15 an hour minimum wage without appearing to care about those who are worse off.

We will be moving back towards those on benefits being called scroungers and a real division between those on low incomes and those on benefits

Labour are in a really tricky situation when you have the likes of Zarah Sultana calling for 15% rises and £15 an hour minimum wage if they don't raise UC, carers allowance, PIPs, etc. by the same amount.

I know Labour is traditionally the party of the workers, but they can't just turn their backs on those who genuinely can't work and that is there big dilemma.

If your typical low paid worker earning £18K a year starts earning £27k a year, benefits will have to raise accordingly or we really will see people dying on the streets

 

[Karimbo]

It would have been easier if there were measures in place to provide a temporary uplift in minimum wage, or hourly pay until the rising costs get under control.

Unfortunately any increases will be permanent, they cant increase minimum wage and then decrease it this time next year for instance.

Which is why there is reluctance to do anything about it.

Grants and one time payments through council tax account seems to be the preferred method to give households more money without creating an expectation of long term increases in wages.

Also the other issue is if you want to get inflation under control you have to allow the market to hit recession. just giving in and offering these increases just adds to the inflation problem. To get inflation back under control, you need to go through a recession so business cut prices and absorb the losses in their margins.

That's the only way to reverse inflation unfortunately.

I am wondering where my ecommerce business falls in to be honest. I don't know if my business is going to weather the recession or get massively hit by it.

My sales have been growing march, April, May despite the cost of living crisis due to more efficent marketing and I hope it can weather it.

 

[Newchodge]

Unfortunately any increases will be permanent, they cant increase minimum wage and then decrease it this time next year for instance.

That would be because the prices are not going to go down. Inflation may decrease, even to 0% but prices rarely reduce.

 

[Karimbo]

---

That would be because the prices are not going to go down. Inflation may decrease, even to 0% but prices rarely reduce.

Oh prices will reduce in a recession for sure. When customers aren't buying, businesses will slash their prices to shift products.

Even of they make no profit, they'll operate just to meet their overheads

 

[Ecommerce&MailOrderGuy]

Seen a lot of price discounting in my market already (gardening).
In fact it started back in April when it already looked like demand was slowing.
A lot of it looks like desperation.....eg, cashflow issues.
It doesn't help the market though - just makes it harder to trade profitably.
Only winners I can see at the moment are Amazon, Google and Ebay as advertising costs continue to rise.

 

[tony84]

It would have been easier if there were measures in place to provide a temporary uplift in minimum wage, or hourly pay until the rising costs get under control.

Maybe like a "bonus" of some description?
I did sort of think this. If I had employees who were struggling financially, I am not sure I would be committing the business to increased wages, NI, pension contributions etc, but I would look to pay a one off bonus with the promise of a review down the line.

 

[tony84]

I sort of get the government argument that if everyone gets a pay rise it has a knock on effect, but try telling that to the people who have always worked and never had a problem and now all of a sudden are needing to use foodbanks.

Im in fortunate position, I can see the rises happening and I am noticing them but I am not losing sleep over them. But I know when I was growing up we had times where the cupboards were full and times where they were empty. Dont get me wrong, I dont think I ever went without (not knowingly anyway) and I never had the stress my mum had of trying to make the ends meet, but I do have memories of times being a bit rocky.

Assuming you are not living beyond your means or your circumstances have not changed someone who goes out and work should always be able to keep a roof over their head, heating on and food in their stomach, those really are the bare minimums anyone expects. The fact that this is now affecting not just the poorest shows that the next 12 months are going to be a bit rough. If the government do not want wages to be increased, they need to subside the basic costs - council tax, energy bills etc. But that needs paying for...

 

[Mark T Jones]

I think you are ignoring the large and increasing number of households who have few pennies to hold on to.

In reality they won't be demographic who lead recessionary pressure.

The main pressure will come from those who have disposable income but decide to rein things in a bit - those bits will will add up to lots. The most irrational spur for this will be if house prices fall (and fall they must)

As a slight aside, I've just witnessed a LinkedIn member moaning about the cost of living crisis because it costs £130 to fuel his 2 year old Range Rover

 

[fisicx]

As a slight aside, I've just witnessed a LinkedIn member moaning about the cost of living crisis because it costs £130 to fuel his 2 year old Range Rover

A neighbour has just sold his big SUV and brought a Toyota aygo. It’s going to save him over £500/month just in fuel. Also cheaper to insure, tax and maintain.

 

[Mark T Jones]

A neighbour has just sold his big SUV and brought a Toyota aygo. It’s going to save him over £500/month just in fuel. Also cheaper to insure, tax and maintain.

Wise man!

I'll repeat the advice- there has never been a better time to offload expensive motors (particularly if they are on finance) and to make do, until we know where things are going

 

[DontAsk]

Maybe like a "bonus" of some description?
I did sort of think this. If I had employees who were struggling financially, I am not sure I would be committing the business to increased wages, NI, pension contributions etc, but I would look to pay a one off bonus with the promise of a review down the line.

BA staff have rejected a10% bonus in lieu of reinstating the 10% pay cut they took during the pandemic. A bonus makes sense to me (having myself taken bonuses in lieu of pay rides in three past), but it does just kick the can down the road.

 

[Newchodge]

BA staff have rejected a10% bonus in lieu of reinstating the 10% pay cut they took during the pandemic. A bonus makes sense to me (having myself taken bonuses in lieu of pay rides in three past), but it does just kick the can down the road.

If there had not been a pay cut, the bonus would be reasonable. But all staff accepted the pay cut and now BA have reinstated the pay of senior staff and ignored the less well paid. Recipe for strike action, I would suggest.

 

[The Byre]

I wish this confounded recession kicks in soon and in full force - I've got a long shopping list of stuff I want to buy and value shares I have been looking at for some time.

 

[Picture Bute]

I sort of get the government argument that if everyone gets a pay rise it has a knock on effect, but try telling that to the people who have always worked and never had a problem and now all of a sudden are needing to use foodbanks.

Im in fortunate position, I can see the rises happening and I am noticing them but I am not losing sleep over them. But I know when I was growing up we had times where the cupboards were full and times where they were empty. Dont get me wrong, I dont think I ever went without (not knowingly anyway) and I never had the stress my mum had of trying to make the ends meet, but I do have memories of times being a bit rocky.

Assuming you are not living beyond your means or your circumstances have not changed someone who goes out and work should always be able to keep a roof over their head, heating on and food in their stomach, those really are the bare minimums anyone expects. The fact that this is now affecting not just the poorest shows that the next 12 months are going to be a bit rough. If the government do not want wages to be increased, they need to subside the basic costs - council tax, energy bills etc. But that needs paying for...

That, as a government argument isn't going to wash, certainly in the public sector. Wages have been stagnant and standards of living have dropped for a lot of people since 2010. Recent measures by the government, like the 'windfall tax' and one of payments for hard up families are nothing more than disguised theft, where government debt is handed to energy companies by using the less well off as middle men. The UK is pretty much bankrupt, has sold all its assets since 1979. Government policy since then has been led by Daily Mail focus groups and the need to get results at an upcoming bye election. We're f****d.

 

[MBE2017]

BA staff have rejected a10% bonus in lieu of reinstating the 10% pay cut they took during the pandemic. A bonus makes sense to me (having myself taken bonuses in lieu of pay rides in three past), but it does just kick the can down the road.

So they should. Disgusting to renage on their promises.

As for the Gov telling workers not to expect or ask for a wage rise, ever remember MP’s refusing their annual award? The usual excuse is it is set by an independent committee or something similar, so it would be rude to go against the award.

Guys, when people are struggling to feed their families, they will want higher salaries. 15% of the UK have now used a food bank, or so I am told. It will take a while for this to work its way out, but the rich are sitting rubbing their hands in glee, looking to grab bargains.

Best join them and help the less fortunate from your own gains.

 

[SillyBill]

They are shouting for 10% rises and £15 an hour minimum wage without appearing to care about those who are worse off.

If your typical low paid worker earning £18K a year starts earning £27k a year, benefits will have to raise accordingly or we really will see people dying on the streets

Interesting, I did wonder how long it would be for these sorts of calls to start. And only to be expected given inflation. I suspect a lot of SMEs would be re-evaluating employing people full stop at these levels as risk of taking on vs reward of extra profit diminishes further. I have shop floor supervisors earning £28k to £30k level. I doubt they'd be happy earning NMW so the true increases to the business overhead would be massive if differentials are to be maintained. This on top of an energy bills going up x2.5, Corp Tax up 30+% and we're still waiting to find out % increase in business rates from April 23. Just gigantic clobbering going off at the moment. IMO they (ergo the government) need to be seriously careful not to squeeze too hard given the engine of growth is the SME. I am intrigued what NMW will be in April next year, it could in theory be a huge % increase (7-10%) but given this will be inflationary they may not go so far. Political hot potato given a % increase not at least matching inflation for the worst off is not going to go down well either.

 

[SillyBill]

Seen a lot of price discounting in my market already (gardening).
In fact it started back in April when it already looked like demand was slowing.
A lot of it looks like desperation.....eg, cashflow issues.
It doesn't help the market though - just makes it harder to trade profitably.
Only winners I can see at the moment are Amazon, Google and Ebay as advertising costs continue to rise.

Yes, seeing that too. Very disconcerting market given raw prices and general cost inputs etc. inflating wildly (hence our production cost and to a less extent our selling price) yet also seeing the same products (which we sell to downstream sellers/retailers) either not moving in price or in some cases reducing. Which is crazy as some items are anywhere from 25-60% more expensive than they were just months ago...I have come to the conclusion it is partly down to whomever is holding the oldest stock can be selling cheapest given prices have been on the march for 12 months now. If you have material you bought 6 months ago you are laughing vs someone who bought last week for instance so very difficult to compare. The other is discounting for general cashflow due to reduced demand or just a desperate need to convert stock to cash full stop. I must admit I am unsettled given one generally has a feel of your own market in terms of prices, buying and selling, and so many odd things going off it is distorting everything.

 

[UKSBD]

Interesting, I did wonder how long it would be for these sorts of calls to start.

Increase Minimum Wage to £15.00 an hour a 24 year old person has about an extra £500 a month

A single 24 year old on UC receives £265 a month (not £265 extra, but £265 total)

Increasing the pay of the low paid, without increasing benefits will kill people.

10% rise for someone earning £30k will give them about £170 a month

10% uplift in UC will give someone about £26.50 a month

Working in %'s is dangerous for those in absolute poverty

Levelling up may decrease the gap between the low paid and medium paid, but it will increase the gap between those at the absolute bottom and the low paid, which would be a disaster.

 

[NickGrogan]

A single 24 year old on UC receives £265 a month (not £265 extra, but £265 total)

Only if they live rent-free and don't pay council tax.

Otherwise, they get the rent paid and a 100% discount on council tax.

 

[NickGrogan]

Wales is giving people £1,600-a-month in a trial of basic income

The Welsh Government has revealed exactly how its basic income pilot will work with around 500 care leavers being the first to benefit

www.walesonline.co.uk

£1600 pcm basic income

Be interesting to see how this works out.

 

[Newchodge]

Only if they live rent-free and don't pay council tax.

Otherwise, they get the rent paid and a 100% discount on council tax.

No, they don't. Only 'eligible' rent counts towards the calculation, and that is invariably less than the actual rent. If they are under 35 their entitlement to Housing Benefitr is sevrely curtailed. Council tax support is no longer 100%. It is very difficult to establish benefit entitlementd from information available on line. You have to go through a calculation process.

I just did a quick assessment as a 24 year old, newly out of work, living in private rented accommodation and paying 'eligible rent' only. The benefits total per week is £151.02, from which rent of £100 and council tax of £1.81 has to be paid, leaving £49.21/week for gas, electricity, water, food, phone (requirement to keep claiming benefits) clothing and travel.

 

[UKSBD]

Otherwise, they get the rent paid and a 100% discount on council tax.

In our area they only get a £370 a month contribution to rent and 80% discount on council tax

 

[UKSBD]

from which rent of £100

To get £100 a week it must be quite an expensive area or in London

In affluent area of Warwickshire (Stratford-on-Avon District) it is only £78 a week

Search for Local Housing Allowance rates by postcode or local authority : DirectGov - LHA Rates

 

[NickGrogan]

Cambridge BRMA​

One Bedroom Rate: £178.36 per week

Weekly LHA rate for June 2022​

Central London BRMA​

One Bedroom Rate: £295.49 per week

Am I missing something?

Local Housing Allowance Error Page : DirectGov - LHA Rates

 

[UKSBD]

Am I missing something?

Yes, you don't get the one bedroom rate if single and 24

 

[Employment Law Clinic]

Cambridge BRMA​

One Bedroom Rate: £178.36 per week

Weekly LHA rate for June 2022​

Central London BRMA​

One Bedroom Rate: £295.49 per week

Am I missing something?

Local Housing Allowance Error Page : DirectGov - LHA Rates

Certainly in London, you'll be missing about half your rent at least, for a one-bed property.


Karl Limpert

 

[UKSBD]

Cambridge BRMA​

One Bedroom Rate: £178.36 per week

Weekly LHA rate for June 2022​

Central London BRMA​

One Bedroom Rate: £295.49 per week

Am I missing something?

Local Housing Allowance Error Page : DirectGov - LHA Rates

As I said in previous post single person under 24 isn't eligible for the one bedroom rate

Cambridge BRMA
Shared Accommodation Rate: £97.00 per week

 

[Newchodge]

To get £100 a week it must be quite an expensive area or in London

In affluent area of Warwickshire (Stratford-on-Avon District) it is only £78 a week

Search for Local Housing Allowance rates by postcode or local authority : DirectGov - LHA Rates

I know, I just used it as a convenient figure.

 

[NickGrogan]

Yes, you don't get the one bedroom rate if single and 24

Your Local Housing Allowance bedroom entitlement​

Based on the information you have given, your Local Housing Allowance bedroom entitlement is:
1 bedrooms - for a total of 1 people
To return to the bedroom calculator, select the ‘Previous’ button.

Household details​

*How many people live in your household?
Total number of people 1

How many couples are in your household?
Total number of couples

How many single people aged 16 or over live in the household (don’t include anyone in a couple)?
Female single people aged 16 or over Male single people aged 16 or over 1

How many children aged between 10 and 15 (inclusive) live in your household?
Female children aged between 10 and 15 Male children aged between 10 and 15

How many children aged under 10 live in your household?
Female children aged under 10 Male children aged under 10

Your bedroom entitlement : DirectGov - LHA Rates

Who makes up all these rules? Are they designed to keep civil servants busy?

Apparently, if you're under 35 you get shared rates... 35!

 

[Newchodge]

Your Local Housing Allowance bedroom entitlement​

Based on the information you have given, your Local Housing Allowance bedroom entitlement is:
1 bedrooms - for a total of 1 people
To return to the bedroom calculator, select the ‘Previous’ button.

Household details​

*How many people live in your household?
Total number of people 1

How many couples are in your household?
Total number of couples

How many single people aged 16 or over live in the household (don’t include anyone in a couple)?
Female single people aged 16 or over Male single people aged 16 or over 1

How many children aged between 10 and 15 (inclusive) live in your household?
Female children aged between 10 and 15 Male children aged between 10 and 15

How many children aged under 10 live in your household?
Female children aged under 10 Male children aged under 10

Your bedroom entitlement : DirectGov - LHA Rates

OK, that gives your bedroom entitlement, now try and work out your housing benefit.

 

[UKSBD]

Your Local Housing Allowance bedroom entitlement​

Based on the information you have given, your Local Housing Allowance bedroom entitlement is:
1 bedrooms - for a total of 1 people
To return to the bedroom calculator, select the ‘Previous’ button.

Household details​

*How many people live in your household?
Total number of people 1

How many couples are in your household?
Total number of couples

How many single people aged 16 or over live in the household (don’t include anyone in a couple)?
Female single people aged 16 or over Male single people aged 16 or over 1

How many children aged between 10 and 15 (inclusive) live in your household?
Female children aged between 10 and 15 Male children aged between 10 and 15

How many children aged under 10 live in your household?
Female children aged under 10 Male children aged under 10

Your bedroom entitlement : DirectGov - LHA Rates

"Please note that single people under the age of 35 are entitled to the Shared Accommodation Rate"

Calculate how many bedrooms you are eligible for : DirectGov - LHA Rates

 

[NickGrogan]

Who makes up all these rules? Are they designed to keep civil servants busy?

Apparently, if you're under 35 you get shared rates... 35!

"Please note that single people under the age of 35 are entitled to the Shared Accommodation Rate"

I edited the post whilst you were replying

 

[UKSBD]

Who makes up all these rules? Are they designed to keep civil servants busy?

No, they are designed to keep single young people who are on benefits in their place.

Don't want the rif raf out in nice villages, group them all together in cheap shared accommodation in the grottier towns

 

[NickGrogan]

No, they are designed to keep single young people who are on benefits in their place.

Don't want the rif raf out in nice villages, group them all together in cheap shared accommodation in the grottier towns

Why would the Labour party want to do that?

 

[UKSBD]

You really think they are much different to the Conservatives?

 

[NickGrogan]

You really think they are much different to the Conservatives?

They claim to be, and they get very upset about Boris lying so I presume that honesty is important to them and their supporters/voters.

 

[UKSBD]

They claim to be, and they get very upset about Boris lying so I presume that honesty is important to them and their supporters/voters.

For workers yes.
They want to improve the pay and conditions for low paid workers

This discussion is about the people who have fallen through the net, those that can't work for one reason or another.

I think what Labour is trying to do is completely wrong if they don't take the people below the minimum paid worker in to account too.

look at it this way

A income £10K

B income £20k

C income £40k

Labour appear to want to decrease the gap between B and C by increasing what B earns

That may be good, but it also increases the gap between A and B which will lead to a catastrophe