The economy, as measured by GDP is not doing badly. BUT the average figure hides as much as it reveals.
There is a sub-economy in which people are suffering more than before from higher prices, colder homes, hunger, financial insecurity and unemployment.
GDP
UK gross domestic product (GDP) is estimated to have increased by 1.1% in Quarter 3 (July to Sept) 2021. The level of GDP is now 1.5% below where it was pre-coronavirus (COVID-19) at Quarter 4 (Oct to Dec) 2019.
COST OF KEEPING WARM
But inflation is causing huge problems for the poorer in the UK. The lowest decile of homes spend more than twice as much on gas as the top decile (4.8% Vs 1.9%). They also spend about twice as much on for and drink as the top decile (20.4% Vs 11.1%)
National Energy Action says that the average gas bill is expected to rise from £467 in October 2020 to £955 in April 2022.
FALLING VALUE OF SAVING
Savers are also suffering. At 5.1% inflation the value of your money halves in 14 years. So it is increasingly hard to keep the value of your savings.
FALLING VALUE OF BENEFITS
Benefits will increase by 3.1% in April when inflation may be 6 or 7%. So the poorest will get worse off. That’s because benefits increase with what inflation was in September. That's OK when inflation is low but not when it's rising fast.
Data Sources:
Employment:
Percentage of spending on heating and food:
Fuel Poverty:
Falling Value of Benefits/Savings:
Paul Johnson IFS
Also See Rule of 72
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