The Recession

I don't know it'll make an overnight difference? We've been at such tiny levels of growth for so long - flat line, to a touch below...

I think it's going to be very bad.

Our mortgage is going up 500 pcm, energy bills gone up 200pcm, both our (12+ year old) cars have just broken and it costs a fortune for anything that isn't junk, but at least that saves us having to buy petrol which has gone up 50%, not to mention food.

Obviously we've cut back on everything non-essential. I'd imagine everyone else will do the same and even then I think people will be losing their homes.

On top of all of this, the current government is the worst I've known.

I don't know many local authorities that have not been asked to make impossible (millions) savings on their budgets .
As their resources are slashed,the holes in the catch net will get bigger and the vulnerable will suffer more.I really hope it's a mild winter and somehow we can claw back some economic stability.

I have to admit my knowledge on economies is probably at primary school levels. So it is very difficult trying to understand what could happen. I just hope automation can stay strong, although it can do when companies experience a downturn.

we've ground to a halt at work (tier3 automotive), nobody buying cars and energy and raw materials through the roof.

The print trade press is full of companies going under at the minute.

The big ones use loads of energy, have very expensive kit on finance and material prices have gone through the roof.

So glad there's just me and the dog to keep busy!

I don't think the 2008 one was that bad - we'd been in our new house for 3 years although both in work, and no kids yet. THIS ONE is much worse - fuel, heat, goods are through the roof.

You know it's bad when you are shopping round for the best deals on cat food !!

We've beaten the utility rise by slashing use massively - quite impressed (or disgusted by our previous waste - select as appropriate)

Food is rocketing as is fuel. Fuel is just insane, and OPEC cutting supply is just going to cause it to rocket again - some serious price fixing going on.

I'm commuting the 3-4 days a week by pedal bike again. That's £4 a day parking plus £6 a day fuel - depending upon which car. Wife still driving to work for a similar £8-£10 a day including fuel/parking. We bought a little run around 12 months ago which was to bail son out/for daughter to use, but we've used it locally as it uses so little fuel. Only thing is it has cost a bit in maintenance this last year as previous owners hadn't done much to it. It's just shat it's clutch release bearing.

We've agreed no Christmas presents in my family, only for the kids. That's a massive relief as One - it's a right pain (I'm one of four) and Two - I'm not going to get any crap gifts. Just need to get the wife's side to do the same as that's where I usually get shoot gifts, one went into the bin after I asked my BIL did he have any need for a jar of hot sauce !

So, back buying skiing holidays and 100″ TV’s by early 2024?

Nope this one is a biggy. Like everything there will be different levels and different time but we are talking 5+ years quite possibly more. No idea what the recovery (for some but not all)will look like but as with everything change is the only certainly.

Buckle up. It going to be a wild ride.

"Death and destruction to mankind, poisoning their brain washed minds"

We've had kids coming back to school because the apprenticeships starter blue collar jobs are disappearing or college is pricey. They can get £30 per week educational maintenance allowance

Nope this one is a biggy. Like everything there will be different levels and different time but we are talking 5+ years quite possibly more

Crickey, I thought I was a pessimist.

I've heard that fuel prices have jumped this morning, some by more than 10p a litre instantly. We've noticed a solid jump in the food shop every week now and still waiting to find out what the new energy bills will be at out new house.

What a time to just get my first mortgage.

I don’t know it’ll make an overnight difference? We’ve been at such tiny levels of growth for so long – flat line, to a touch below…

Recession is just a technical term for sustained contraction of the economy, as you say, we've been bumping along near the threshold for quite some time. Just because it officially becomes a recession, or doesn't, by a fraction of a %, makes no difference to the average punter or employer.

What does make a difference is high prices on raw materials and food and energy, a weak currency making those worse, high interest rates, and cutting yourself off from your biggest export market. The end result of everything we've done, and haven't done, for the past 10 years.

We are all spectators in this, there is no government to speak of, and even the leadership of our central bank appears to have lost the plot.

What happens to us should serve as a warning to other developed nations about the dangers of fringe political and economic ideas gaining power.

Furniture maker here. To a degree, many buyers of handmade furniture tend to be "recession proof" either because they are affluent enough to absorb the extra costs or are retired with no mortgage and fewer fuel overheads.

Wood (mostly from Canada and Eastern Europe) prices spiked badly in the summer, but have come down a fair bit in the last couple of months. Orders are piling in at the moment in the usual pre-Christmas flurry.

My memory of 2008 is many being asked to take pay cuts rather than be made redundant. House prices slowed and went down a bit for a time. It felt more like a stall than a crash to me. The trouble is inflation wasn't rampant like it is now so a pay cut now would stretch household budgets to snapping point, and this time, there is no option to cut interest rates to help prevent a crash.

Haven't wages been trailing inflation for years anyway? So either companies can afford to pay us and choose not too, or many companies are really on the brink and have been for years? Sorry for the basic questions.

I still know people who are heading off on holidays, planning on buying new cars etc. Fair play to them, I wish I had their money. I'm looking to try and save all my spare cash for the rainy day, it seems, is just around the corner. And after being rinsed from buying a new house, the struggle is real.

My memory of 2008 is many being asked to take pay cuts rather than be made redundant. House prices slowed and went down a bit for a time.

The closest match to this is probably the 1990s crash, with a combination of inflationary pressures, high interest rates and the market deciding that sterling was overpriced. Even then, there was enough agility in the economy to rebound within a couple of years, my worry is that the additional economic problems of Brexit and Ukraine could prolong the pain significantly.

We both have good jobs, and a mortgage fixed for 10 years, but we are really feeling it still. I can only imagine what it is like for those on the breadline.

The problem for the economy is that every pound I spend extra on energy, is a pound I don’t spend in a pub, coffee shop, small shop, hotel, etc.

The UK seems to be tracking pretty closely to the Eurozone.

Much of Europe is already in recession with Germany and Italy due to follow in the next month or so. Germany is also looking at high inflation in 2023 like us.

It’s worth remembering the root cause of the current economic woes is war / our decision to follow other countries in ending trade with Russia / purchase of Russian commodities.

For sure that is a large part of it. But many raw material costs were soaring before Feb this year when Russia invaded. The war looks like another long drawn out affair, so it would be easy to assume that we will continue to pay high prices until it is somewhat resolved, whatever that looks like.

I don’t think the 2008 one was that bad

If that's how you feel you can credit Gordon Brown for that - it was the worse international financial crises since the 1930s.

Although he was subsequently punished for the measures he took. In fact we all were with the Tory-Liberal Democrat coalition's brutal and unnecessary austerity programme.

If the recession of the early 1990s seems to have been worse, and certainly is was in terms of people losing their homes and jobs, then it is because we had a Tory government who sat back and let the market "adjust"..... the market always knows better apparently.

And yet John Major is seen by many as an okay Tory PM, certainly better than Johnson, despite being a right-wing thatcherite. I can only assume that it is because of his grey suits, grey personality, and dreary way of speaking.

Obviously, the external economic shocks are similar, but what is key is our economy's ability to withstand them and then bounce back as quickly as other economies.

https://www.oecd.org/economic-outlook/september-2022/

This was before the mini-budget shenanigans, so I'm not sure if the 3.4% forecast for this year, or the growth (!) forecast for next year is still in play. Germany is also a bit of an edge-case because of its unusually high dependency on Russian energy.

The problems will start in 2023/4 when perhaps the Ukraine shock is easing, and other economies are looking to recover - where will the growth we need come from? We have cut any potential recovery off at the knees for ideological reasons.

The problems will start in 2023/4 when perhaps the Ukraine shock is easing, and other economies are looking to recover – where will the growth we need come from? We have cut any potential recovery off at the knees for ideological reasons.

Sorry, excuse my stupidity. What do you mean by this? Especially the last point.

It’s worth remembering the root cause of the current economic woes is war / our decision to follow other countries in ending trade with Russia / purchase of Russian commodities.

And a over supply of credit, and a over supply of money and....

The war in Ukraine is obviously a big issue but this is a cumulative situation with compounding issues.

One of the most alarming aspects of this economic collapse, is that the institution of Law is now so undermined it is in many ways not fit for purpose. Cuts to legal aid have meant massive backlogs of cases through courts, meaning Justice cannot be served. Many people held on remand and in detention centres*, because of this, which only costs the taxpayers even more anyway. The tories will attempt to erode our legal rights even further. I'm sure their plan is to privatise courts, which will undermine Justice even further.

*Run by private security firms you'l find many Tories have links to.

This recession isn't an accident; it has been planned for decades. Democracy on sale to the highest bidder.

Covid-19 + Ukraine War = Long Recession

The Ukraine war alone has affected the very basic level of energy cost and that alone will jack up cost for everything.

That's the genius of sanctions without thinking through.

My personal circumstances:

-nursery fees to cost £700/month from January (twins in two days a week)
-mortgage rate to end June next year and the mortgage company says we won’t be able to remortgage due to wife not earning full salary, expect £1000+ extra in the mortgage when we go into SVR
-Energy bills up £300

Our get out of jail card is we must sell the house. If we don’t sell the house and downsize, we simply do not have the money to cover bills. Simple as that. We are absolutely f*****.

This recession isn’t an accident; it has been planned for decades. Democracy on sale to the highest bidder

Are you wearing a tinfoil hat, or are you being serious?

2008 was bad enough that the building trade essentially ground to a halt. It was the catalyst for me leaving the UK for Germany.

However I think this is going to be a lot worse. The outlook is bleak.

Fuel, food, travel.... Everything has become noticeably more expensive over the last six months.

Our fuel bill in our old flat increased by"only" 35%, which is nothing compared to people's bills in the UK.

Many people we know are feeling stretched, perhaps in part to their somewhat decadent lifestyles they've enjoyed (or felt necessary) over the last years.

GF and I have chucked our flat in Munich, sold most of our possessing and moved into a van. It has been the plan for some years, but the timing seems good given the current climate.
We worked out the rent alone was costing us ~45€/day and we needed to clear 1800€ a month just to exist in Munich (that's before any luxuries). That was a few years ago before the energy prices and other living costs increased. Probably nearer 2k now. Found it hard to justify to myself the idea of being trapped in a system/cycle of working just to unhappily exist in Munich.

My investments have taken a hit over the last six to 12 months, too.... About 30% down. Interesting piece in the Economist recently about the global financial markets. Didn't make for happy reading.

The first 10 minutes is the article I refer to...
https://podcasts.google.com/feed/aHR0cHM6Ly9yc3MuYWNhc3QuY29tL3RoZWVjb25vbWlzdGFsbGF1ZGlv/episode/NjM0MDYyMmI3MGVlNDgwMDEyODgxNjQ0?ep=14

I reckon the last decade or so of easy credit has meant that the majority of 'comfortably off' people are living pretty close to the limit of their income (not to mention those already on the breadline). Even if there aren't job losses, I expect that the increasing mortgage costs due to interest rates, inflation and increasing energy costs mean that many people will be in dire straits.

Sorry, excuse my stupidity. What do you mean by this? Especially the last point.

I think he means Brexit...

edward2000

We are sort of with you. Big mortgage is okay until 2024, but then what?

Twin as well, now both in private schools due to special needs that one is being ignored by the LEA (we have been fighting this for three years).

Bills we are ok, we are very good with power, fuel and not wasting food etc.

My truck needs to go which we use for mtb'ing as a family, but its worth too much and its just sat there since we leased a Merc EQA.

We love living where we live but it mad expensive, so ultimately the house could go and we could move further out of Greater London?

We both work full-time but I am now looking for my next contract/role and its tough out there. Luckily the wife earns a lot, but not enough. First world problem you will all say but I dont see many options baring selling the family home long term.

Are you wearing a tinfoil hat, or are you being serious?

It's obvious, unless you've been wearing tinfoil specs. An economy reliant on service industries is never going to survive when other foreign markets get more competitive and cheaper. Those with true economic power saw this coming decades ago, it's really not rocket science, it's basic maths.

I feel for people that are looking at the prospect of selling their homes already, hopefully it won't come to that.

it’s basic maths

Well, I must be thicker than I thought.

Effing Mogg hasn't got a clue, or is in on it.

He's claiming that inflation is a product of Q/E and monetary expansion. He's off his Victorian penny farthing.
Facts just don't bear this out. I'm not sure he understands Q/E. The BoE can always swap reserves for bonds.

Simply, there is has been no growth so it's technically impossible that there is too much money floating about.

The BoE are in a mess and don't know what to do - there's a complete reluctance to understand that the state can always prop up the economy with bond purchases, or new money. And this is it odds with Tory ideology. Despite the fact it's been a normal mechanism for years. So they're in a corner.

I think this recession will be off the scale worse than anything else we've experienced - but much dependent on what the government does next.

The markets were always heading in a failed direction - it's been on the cards for a while, but instead of examining the value of what a market offers in terms of societal benefits - there's this blind idea that they know best so keep propping them up.

Until we stand back and re-work the entire system instead of just putting a plaster on it to protect the status-qup, frankly I think we're pretty doomed. And we as soon as we get close to actual change - the establishment will just push against it. Communists etc.

We have inflation, failing markets (equities, crypto, currency), house prices sat on a precipice, back-end of a pandemic that's still around, and a very local war. I also think equiities haven't really tanked yet.

What comes next?

The state has to be mobilised very much a in post-war fashion, and target all the real needs of the economy.

But that's no going to happen.

I don’t think the 2008 one was that bad – we’d been in our new house for 3 years although both in work, and no kids yet. THIS ONE is much worse – fuel, heat, goods are through the roof.

I was very lucky for the 2008 crisis, I changed jobs and doubled my wage literally three weeks before the shit hit the fan. This time round I've had to change jobs just before it all kicks off but my pay has stayed roughly the same. I've also had a massive increase in my outgoings despite being debt-free as I now have a 90 mile commute every day (was by bike so basically free), food is more expensive, utilities are rising fast and I'm trying to move closer to the new job which looks like it's going to double my rent. If I didn't have a few grand in savings to rely on I couldn't keep on going right now so if things really go to crap then I may have to give up the job and flat them move back home with my parents. Any ideas of holidays etc are well at the back of my mind right now!

This one is going to be a very bumpy ride for a lot of people.

My wife's working for an agency and is only on a promise of work until July. That makes me a bit concerned. I need to pull my finger out and get a promotion before then.

I don’t remember much of the 2008 recession

Just scanned though the posts above and I reckon I've been (as an adult) through more than most.

I left school in 1981 in a Northern town, so saw the de-industrialisation at first hand. Then we had the early 90's, then 2008/9 and now this.

The one thing I learned is that you're either lucky or not, for everyone who suffers there's someone else who it's not impacting one iota.

Luckily, I've always been lucky - and now at an age that even though we're paying out more for everything like most, we can afford it.

Only real impact I think will be my DC pensions, as they've all been hammered. I put early retirement off last year, pushed back a couple of years to when I'm 60 but I do have DB pensions too.

only when the tide goes out do you discover who has been swimming naked

recessions tend to quite asymmetric. 2008 was ok for us even though started a new job. hoping this one will be ok as I've just started a new job again. Even if it isn't, I haven't overstretched on easy credit over the last few years and have a reasonable warchest built up.

as I now have a 90 mile commute

Must be a great job!! 😳😳

Well, I must be thicker than I thought.

It's ok; most people believe themselves to be more intelligent than they actually are.

Forget the illusion of 'economics' as presented to you by the media etc. Look at the reality of our economy; a series of troughs and peaks on a graph. During the troughs, the majority suffer, yet a very small percentage gain considerably. Some of the biggest profits are to be made during recessions; from massive interests on payday loans etc, to price increases of things like fuel, energy, food etc. Disaster Capitalism is very lucrative for those who have power. Private health care benefits from people being sick. So; if you want to make money from healthcare, it's in your vested interest for many people to be sick, right? That's at the core of what we're seeing now. And have a think about this; if you get into financial trouble because you can't afford to pay your mortgage/loans etc, what legal support is there for you, that doesn't cost you money? There isn't any. This is why you pay for things like mortgage protection insurance and that. You're already paying in case a disaster happens. Only problem is, if you ever actually need such help, you'll invariably find it's inadequate anyway. But by that point, it's too late. You're on your own.

-mortgage rate to end June next year and the mortgage company says we won’t be able to remortgage due to wife not earning full salary, expect £1000+ extra in the mortgage when we go into SVR

Who's the mortgage company? If their response is, as you say, "we can't give you a cheaper rate cos you can't afford it, so you have to go on the more expensive rate" then that is insane, and worth a serious complaint.

The state has to be mobilised very much a in post-war fashion, and target all the real needs of the economy.

Someone has to stand up - politically - and make that plain. It's an opportunity to build an economy and society for the long term, but I fear it will be squandered

and a over supply of money

Nonsense. As rone (welcome back!) says above, growth has been stagnant for a decade. We need much more stimulus from govt not less, and it needs to be targeted in the right places, which is public services, infrastructure and direct support for those struggling as a result of inflation.

The problem for the past decade is that the money supply has found its way into the bank accounts of the super rich and off-shored corporations rather than the real economy (ie. all of us). It’s not even socialism for the rich any more, it’s plain daylight robbery. The BoE prints money and gives it straight to the rich, and the rest of us suffer. I think people are finally realising this, and it’s why the opinion polls are where they are.

it needs to be targeted in the right places, which is public services, infrastructure

^This

and

The problem for the past decade is that the money supply has found its way into the bank accounts of the super rich and off-shored corporations

^This too

@edward2000

Well worth talking to a few mortgage brokers. They'll be used to dealing with people in worse circumstances.

Worst case scenario is just fall behind with payments. They'll have to come up with a payment plan then and failure to do so wouldn't go down well with courts if they tried to repossess. And you have to be seriously behind for them to even start repossession proceedings.

Missing payments would wreck your credit rating though.