“Crisis”

In the UK we seem to move from one crisis to another. As I write this we have a salad crisis with supermarket shelves empty of cucumbers, tomatoes, and peppers. Interestingly the independent stall on Chiswick High Road pavement has shelves full of those items. I gather that the big players are having supply problems as they are engaged in a fierce price war and farmers are struggling to get paid enough to make a living. Anyway, I wouldn’t be surprised that by the time I finish this article the supermarket shelves will be full again.

This time last year there was a housing crisis. Prices had “Gone through the roof’ and no one could afford to buy. We now have another housing crisis because prices are falling sharply driven by “high” mortgage rates – high by 21^st century rates but low in contrast to 1980’s when rates reached 18%. Interestingly, only 28% of properties are owned with a mortgage, most of which are on fixed rates with a minority close to expiry.

The current “cost of living crisis” is of course a real and present problem for a significant segment of the population. Research suggests that between 20% and 25% are “concerned” but 75% to 80% are not. Data from retail banks throw some light on this. For example: Lloyds 26 million customers have £312 billion on deposit or in wealth accounts. Up £3 billion from a year ago and HSBC’s UK deposits are up from £178 billion to £181 billion. (Incredibly, in the UK there is £1.8 trillion in people’s current accounts!)

Another interesting piece of data is around public finances: Income tax revenues surged 11% and National Insurance by 12% from April 2022 to January 2023. So it seems to me that that many people must be in a better financial situation today than they were before the pandemic.