The Cost of Living Crisis!

Whatever television station you watch or newspaper you read, you can't fail to avoid the emerging 'cost of living crisis' unfolding before our very eyes. I can't remember a time when I have been so aware of rising prices, soaring inflation and dramatic hikes in the cost of utility bills. Using the word 'crisis' has been criticised for its dramatic, frightening cogitations, but when one looks at the economic uncertainty across the globe, it is clear this is appropriate for the times we are living though. These are momentous months for many reasons, not just the cost of living, but when looks at the different factors at play in this 'new World order,' it is clear there has been a significant shift, creating the most unstable economic conditions for over forty years or more. These are difficult days for everyone, and we need to understand just how serious this situation is. This isn't something that can be solved quickly, all of us will have to battle to keep our heads above water.

The seeds of this current crisis were sown in 2016, after Britain voted to leave the European Union. No one really expected the UK to remain the economic power house it was after we voted to leave, and if they did, they were seriously deluded. I was someone who envisaged a time of upheaval and hardship, but like most people, I believed it would be a temporary blip, and we would overcome the problems relatively quickly. Brits are a hardy bunch, and we have lived through worse periods in history. With fortitude, faith, and backbone, it wouldn't be too long before we were back on track again.

At the time of the vote, I was living in Spain with Darrell. We lived a relatively frugal existence; with my husband flying back to Australia regularly, I learnt to live on a small budget of 30 Euro a week. Life was hard, but the sun was shining and life was good. I loved my new Spanish home and believed I would remain an expat for many years to come.

Of course nothing lasts forever and in 2018 I moved back to the UK for family reasons, as Darrell continued to commute From Europe to Australia, caring for his Mother after her cancer diagnosis. These were arduous years for us, as we tried to restructure our  life to suit our changing circumstances. Darrell would fly to Britain when he could, and I would travel to Asia once a year; it was an arrangement that worked well until the pandemic crashed head long into all our lives in 2020.

The biggest factor in the current 'cost of living crisis is of course COVID-19. The money spent by Governments all over the World propping up ailing economies throughout the worst of this virus was huge, unlike anything any of us had ever seen. Locking down a country isn't a cheap option. The British Government alone spent hundreds of billions of pounds paying staff to stay at home, as businesses remained closed for months on end. Even I was paid a wage, even though the pub where I worked was closed. At the time it was great, but all that money has to eventually be paid back.

The pandemic still rages on, although as a nation, Britain is learning to live with it. It is unlikely we will ever be locked down again, but we will be living with the consequences of COVID for many years to come. The vast sums spent keeping families afloat, while they languished at home is shocking to contemplate, but the hangover from this strange period is only just beginning today, two years later. After Brexit, no one expected a public health crisis, and the British economy has suffered untold amounts of damage. Through mismanagement, waste of public money and falling tax receipts, it was only a matter of time before we started to feel the pinch; from 1 April that process of 'paying back' began.

They say bad things come in threes, well there is yet another catastrophe looming on the horizon, with war in Europe looking ever more likely! After Brexit and a global pandemic, the World is now on the brink of World War III, as Russia invades Ukraine. Yet another disaster of incalculable magnitude, after a series of bad choices and unforeseen circumstances; conflict is now unfolding on the continent, as the daily news reports, uncompromising rhetoric and threats from Russian President, Vladimir Putin become increasingly worrying and venomous. The death and destruction, economic sanctions and refugee crisis has started to reverberate across the planet; all of us have begun to suffer the knock on effects of the war in Ukraine.

The cost of everything is going up. As the fighting intensifies, oil prices have skyrocketed, causing massive increases in the cost of oil. Gas, electric, and petrol are all significantly higher than they were and people, already feeling strapped for cash, are now feeling the squeeze tightened further. Inflation is creeping up and looks likely to top ten percent by the end of the year. As sure as night follows day, interest rates will undoubtedly rise, causing a drastic increase in mortgages. Food prices are exploding; as someone who shops in a supermarket daily, I am well aware of the increases. The new European war has curtailed the flow of trade between Ukraine and the rest of the World, making resources scarcer. The breadbasket of Europe is no longer exporting wheat, and the rest of us will have to pay sharply more for a loaf of bread and other products once transported from Ukraine.

I am well aware of the cost of the things I buy; I have seen my shopping bill nearly double since the pandemic, and it isn't going to change anytime soon. When the price cap on gas and electric was abandoned yesterday, utility bills rose by 54% immediately. I am luckier than most, because I do not pay bills where I am living, but will contribute more in other ways, helping to alleviate the costs involved. With higher tax and many of the measures introduced during the pandemic coming to an end, ordinary people are feeling the economic pressure. The cost of living crisis is causing the biggest drain on incomes since the 1950s, and none of us are fully aware of the consequences of circumstances, that are compounding the intensity of this dangerous crossroads. Whether or not families survive the next few years very much depends on the different factors at play. The biggest concern for everyone now is the Ukrainian war and just how long it goes on for, affecting all our lives.

For now, Darrell and I are fine. However, we don't have a home to keep and can save money relatively easily. My goals and aspirations still remain on track, with the possibility of early retirement in four years time, funding a new life in Portugal or somewhere a little more conventional. My future plans are very dependent on how well my pension does and my scope to save the maximum amount of money in order to buy a home. I can only rely on my own frugal abilities, rather like I did when I lived in Spain, but ultimately remain at the mercy of events beyond my control. As usual, being the realist I am, I expect the worst but hope for the best; lets pray the World returns to normal soon and all of us can finally breathe a sigh of relief, restarting where we left off in 2019!

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