UK economic hardship shows no sign of easing

Manal Lotfy in London , Friday 14 Jul 2023

The cost-of-living crisis in Britain has been casting a dark shadow over everyday language.

UK economic hardship shows  no sign  of easing
Education workers rally during a day of strikes across the UK

 

Have you ever entered a supermarket to buy a bottle of cooking oil, a packet of coffee, or a bag of pasta, only to find that the size of the package has decreased?

If you live in the UK, you have probably gone through that experience repeatedly over the past few months. In order to avoid obviously raising prices, manufacturers have been reducing the size of packages, hoping that consumers will not notice.

However, British consumers, “squeezed” by their increasing electricity, gas, water, and food bills, have noticed the “food shrinkflation,” or the effect of inflation on reducing the size of food products.

They have also noticed that their purchasing power has been declining, forcing millions to change their consumption habits.

Since last year, food prices have increased by almost 20 per cent in Britain, and while the overall inflation rate is 8.7 per cent, food price inflation is much higher at 16.5 per cent.

A survey of consumer activity conducted by Barclays Bank in Britain found that families are focusing their spending on essentials in what has become a cost-of-living crisis.

According to a Barclays survey, 70 per cent of consumers have noticed food shrinkflation or a decrease in the size of food products such as chocolate, potato crisps, and bottles of cooking oil, while prices have remained the same or even increased.

The survey also showed that spending on non-essential goods had increased by only three per cent in Britain owing to consumers reducing their spending on non-essential goods. Spending on foodstuffs increased by nine per cent, not because of an increase in consumption, but because of continued price hikes.

If anger due to food shrinkflation is a common feature among British people, reactions vary. About 20 per cent of consumers said in the Barclays survey that they are boycotting supermarkets selling reduced-size products and buying instead from cheaper wholesale stores.

Others said they had reduced their consumption of food altogether by skipping meals, while still others said they had substituted daily shopping for a big weekly shop and were buying reduced-price food products.

People are also increasingly cooking with microwave ovens to save money as energy prices soar, research by data firm Kantar suggested. The study found there were four per cent fewer meals made using a regular oven in the 12 weeks to 11 June versus the same period last year, while microwaved meals rose by eight per cent.

Nearly 70 per cent of households said they were “extremely worried” or “very worried” about rising food prices.

“People are thinking more and more about what they eat and how they cook as the cost-of-living crisis takes its toll on traditional behaviours,” Fraser McKevitt, head of retail and consumer insight at Kantar, told the BBC.

Another survey conducted by the British Retail Consortium, a trade group, found that the total spending by households in the UK is shrinking due to a decline in living standards.

Spending on new clothes, cinema tickets, and restaurants has declined significantly in Britain, and this threatens the service sector, a major part of the British economy with millions of employees.  

New figures show that around 11 million adults in the UK are now struggling to pay their bills. According to the country’s Financial Conduct Authority (FCA), the financial regulator, last month 3.1 million people were facing difficulties paying their bills.

The financial watchdog found that 11 per cent of adults have missed a bill or loan payment in at least three of the previous six months. It said that some people had reduced or cancelled insurance policies to reduce the pressure on their budget.

The cost-of-living crisis is also threatening the property market in Britain. Experts are warning of a looming mortgage crisis as inflation is forcing the Bank of England to raise interest rates, with this feeding through into higher mortgage rates.

Latest figures show that an average two-year fixed-rate deal has risen to more than six per cent. For many homeowners, it means they may be unable to afford their repayments when their current mortgage deals expire.

Such economic pressures have led to a change in many social habits. Two out of every five Britons now say that they are reducing eating out, travelling abroad, and socialising, casting a dark shadow on young people in particular.

As for celebrations such as birthdays and weddings, recent figures show that nearly a third of Britons have refused invitations to attend weddings due to the cost-of-living crisis and the lack of money to buy gifts or new clothes.

All in all, the cost-of-living crisis has left many Britons feeling increasingly lonely and miserable.

The crisis has also been having a major impact on everyday language, with a significant rise in the use of words associated with debt, austerity, and food prices. It has led to a change in the way people think about the future, as millions have become more pessimistic about their financial prospects.

“Cost-of-living crisis” has become one of the most widespread expressions used in Britain this year. It is not possible to browse a newspaper or news site in Britain without finding this expression.

There is also “inflation,” referring to an increase in prices and a decrease in the purchasing power of money.

“Squeezed middle” refers to the pressure on the middle classes because of a decline in the purchasing power of incomes. Another expression that has increased significantly in use is “wage stagnation,” or slow and uneven wage growth compared to the inflation rate.

According to the UK think tank the Resolution Foundation, workers in Britain are worse off by about 11,000 pounds sterling after 15 years of “completely unprecedented” wage stagnation.

Words such as “hardship,” “poverty,” “deprivation,” “financial stress,” and “anxiety” are all being used with greater frequency to describe the emotional impact of the UK’s cost-of-living crisis.

* A version of this article appears in print in the 13 July, 2023 edition of Al-Ahram Weekly

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