Cost of living poll: As inflation surges and bills rise, are you worried about money?

Brexit: Freedom from EU will ‘combat cost of living’ says Tory MP

We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info is looking to answer that by finding out how the gradually increasing cost of living is affecting consumers and just how concerned they are about what the country’s leaders are doing to make the UK affordable for its citizens. The pandemic has disturbed economies across the world, while many seem to settle to pre-pandemic levels, the Bank of England announced yesterday that they will be keeping interest rates at a historic low until after next year’s general election.

This could see a further erosion of Briton’s cash savings and an increase on expenditure in light of the National Insurance hikes as well.

While most are worried about making it through to the end of the month, a scarier truth may be what lies ahead in the long-run.

The Bank of England (BoE), poised to keep the UK’s economy afloat despite the global pandemic, dropped the base rate to 0.1 percent in March 2020 and has since announced their intentions to keep it in place, to the dismay of savers.

The Bank of England said on their interest rate decision yesterday: “The Monetary Policy Committee voted unanimously to keep interest rates at 0.1 percent.


“By a majority of 7-2 they voted to maintain the amount of quantitive easing at £895billion.”

Commenting on the base rate decision, Walid Koudmani, market analyst at financial brokerage XTB, said: “As widely expected, the Bank of England has left rates unchanged at 0.1 percent with members voting unanimously.

“While the central bank chose to wait and said that monetary policy remained appropriate, today’s UK PMI data could be one of the factors that influence the BoE to change its monetary policy sooner rather than later. 

“The central bank has been under increasing pressure as it contends with the slowdown in economic recovery along with the inflation issues which are being fuelled by rising costs and supply chain issues.“

The base rate is currently far below inflation, meaning that any cash savings stagnating in savings account or under a mattress is losing its buying power with every moment it spends there.

Inflation rose by 2.1 percent in May this year with the Consumer Prices Index rising from 0.7 percent in March to 1.5 percent in April.

The housing market has lead these increases as the cost to buy or rent increases far more than average inflation.

Halifax reported that since the year 2000 the average house price to earnings ratio went from 5.4 to 10.8, heavily outweighing the pay packets of consumers looking to buy properties.

Martijn van der Heijden, CFO at Habito, commented on the impact of the interest rate announcement on homeowners: “The OECD (Organisation for Economic Co-Operation and Development) warned this week that the UK is expected to have inflation running at about three percent at the end of 2022, the highest rate of the advanced economies.

“Borrowers who are on a variable rate should still consider the impact that any base rate rises this year could have on their mortgage.

“Even if the rate increases by as little as 0.25 percent, this could see their repayments shoot up by hundreds of pounds a year, so it’s worth looking at all the options.”

The low interest rates and rising inflation has had a devastating effect on the cost of living in the UK and the recent rise in energy prices and universal credit cuts have not spared consumers their peace of mind.

Cost of living is defined as the prices of everyday items necessary to survival, such as groceries and rent, both of which have seen steady growth throughout the pandemic, unlike job security and income.

While April 2021 saw many low-wage workers receive a pay rise as the national minimum wage grew by 2.2 percent.

However, this didn’t quite have the desired effect for those left jobless or on furlough due to the pandemic.

Furlough supported millions of workers across the UK, and as the end of the scheme nears many are fearful for what might lie ahead of them both in career prospects and having to enter a torrentially chaotic job market post-pandemic.

This combined with the recent National Insurance tax hikes, despite Boris Johnson’s promises to not raise taxes, is making many question what is being done to protect the average consumer from living in an unaffordable market.
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