After seeing inflation rocket to 10.1% in July, it slowly started to decrease. The public were able to breathe a sigh of relief as inflation settled at 9.9%. Unfortunately, in recent weeks, we have seen it soar up to the 40 year high of 10.1% yet again.
Inflation is expected to reach a peak of 11% in the upcoming months and then drop back down to 10.1%, before it starts to come down in a few months.
It has been reported that this worrying jump is mainly down to the surge in energy prices as well as rising costs for food and drink. Our basic everyday items are getting more and more expensive. Households are having to make decisions on what are the essentials and what they can afford to be without.
The New Normal?
People have gone from living life as normal to sitting in cold houses. They don’t have want to use too much gas and increase their bills. People are getting uncomfortable in their own homes to save as much as they can.
A survey taken on request of the BBC by Savanta Comres showed 47% of people found that energy bills were the most significant increase in cost seen by their household.
Nearly nine in ten of those asked were turning lights off to save money in the last week, as well as turning electrical goods off standby.
Amongst the main price increases were the price of cereals, milk, and cheese. These all went up along with energy bills and transport costs. With the prices of basics going up, it’s understandable that a sense of uncertainty is consuming the public and having an effect on mental health.
In the survey conducted by the BBC, they found people are having to change their spending habits to help them cope. They’re having to cut back on what we are coming to think of as luxuries such as clothes spending, taking fewer day trips as well as travelling less to meet up with family or friends.
To cope with these rises, employees are feeling the need to take action. They are not putting the heating on and taking second jobs to make ends meet and keep their homes running through this crisis. This removes the work/life balance and takes employees away from spending time with their families. It’s no surprise this constant yoyoing of the cost of living is beginning to have an adverse effect on people’s mental health.
Reports are saying that as we go further into the colder months, inflation is likely to keep rising.
People are going to need to have to make some hard choices on what the essentials are to keep functioning. Payroll systems are going to have to develop into the modern world to help keep up with the growing demand of employees needing real-time pay in this everchanging environment.
At Income Group, one of our main focuses is employee wellbeing. With our IGsend software you can pay employees instantly 24/7, 365 days of the year. In this cost of living crisis, being paid instantly could improve the financial wellbeing of employees and help make it easier for them to budget for their essentials.