Displaying items by tag: cost of living

Last week we prayed about school uniform costs. This week we can be grateful that Marks and Spencer are offering families money off children’s clothes if they donate school uniform hand-me-downs to help parents struggling amid the cost of living crisis. The second-hand uniforms will be sold via Oxfam’s high street chain and a new ‘back-to-school’ eBay shop.

Loan sharks say business has never been so good, but there are huge risks attached to this type of borrowing. One loan shark calls himself an ‘enforcer’- referring to what happens if payments are missed. ‘The car is damaged, house windows and doors are pulled out, and even people get badly beaten.’ He says beatings are rare but admits to breaking legs, smashing teeth or eye sockets, leaving people hospitalised. Nearly all his customers are regulars, paying off debts within two or three months - then they are back a few weeks later. With high inflation demand has soared. He now hears from single mums and families needing smaller amounts of £500 to £1,000 to pay for gas or electricity or for groceries. Interest rates up to 50%, or ‘double bubble’ terms, where the original loan is doubled each month, are often applied. Most clients would accept any terms, out of desperation. Borrowers are usually lower-waged, full-time workers.

A Christian economist has urged churches to consider setting up benevolence funds to help members struggling with the cost of living as inflation proves more persistent than expected. Former IMF economist and government debt manager Dr Paul Mills said the step was needed for those on fixed incomes or losing their jobs. He was speaking after an economic advisor to the Chancellor said the Bank of England may need to spark a recession to finally get rising prices under control. The bank's target from the Government is to get inflation down to 2%, but the public has yet to see the pain that is coming through the economy from interest rate rises. On 22 June the base rate increased to 5%, a bigger increase than expected. Dr Mills said it would help to pray for the nation, and for medium- to long-term steps to turn things around.

The YMCA will continue its summer activities to entertain and feed young people and children, particularly from struggling families. It wants the Government to invest more in youth projects to avoid crime down the line and help desperate families as the long summer holidays loom. Richard James has urged churches to rally around their communities and offer similar initiatives for the children in their parishes. Experts foresee a difficult summer for families struggling with the cost of living crisis, as children will not receive free school lunches. James has seen a noticeable difference in children's experiences using the YMCA’s summer services in recent years and says it feels as if every year is another challenge. He says, ‘Some boroughs’ budgets have zero pounds per young person per head.’ In 2020, YMCA England reported a billion-pound decline in the amount of funding afforded to youth services by local authorities, with a decline of 69% since 2010. See

‘We have a low-wage, high-welfare economy, which means people depend continuously on tax credits and all sorts of other welfare help in order to get by. That is not a sustainable situation for millions of households up and down the country’, says Christian economist Professor Adrian Pabst. As the cost of living crisis continues, the prospect of corporations engaging in increasing the cost of items at the shopping till to keep their profits high is facing investigation by the Competition and Markets Authority (CMA) amid ‘ongoing concerns about high prices’. The CMA is looking at whether increases are linked to ‘any failure in competition’. Recently, Tesco’s chairman said it was ‘entirely possible’ that food producers are hiking prices more than necessary. Professor Pabst asks, ‘Do workers deserve a pay rise to match inflation? Christians should be on the side of the dignity of labour, not siding with private profit.’

Independent Christian economist Bridget Rosewell, previously economic advisor to the Greater London Authority, said, ‘I'm expecting the economy to be in an uncomfortable place and we shouldn't lose sight of the long term, in the short term.’ The Bank of England has raised interest rates twelve times in a row and believes inflation will fall slower than predicted as food prices stay stubbornly high. Interest rates take a while to feed through into prices but more stable prices will eventually come through. People with mortgages should expect their interest payments to rise. Pray for people to not overextend themselves or take out loans if they are not sure how they will repay them. Ask God to remove envy and the love of mammon across the UK so that people do not think that they have to have everything that others have. 

The amount suppliers charge for energy was cut by Ofgem to £3,280 as wholesale prices fell. But bills will still rise in April as government help eases. Ofgem's announcement does not affect each household’s payment for energy units but it reduces costs that the government faces. Average household bills will rise from £2,100 to £3,000 annually in April because government help (Energy Price Guarantee) becomes less generous and a £400 winter discount on bills ends. The TUC’s general secretary said, ‘Energy bills are out of control. The government must cancel April's hike. As costs of wholesale gas plummet, ministers have no excuse for not stepping in.’ Under the government guarantee, a household using a typical amount of gas and electricity in England, Wales and Scotland is paying £2,500 a year. Without state support, that annual bill would have been £4,279 since January.

After a wild few months in the UK economy, the Government wants to raise more money to cover a big black hole in its accounts. Jeremy Hunt, the Chancellor, has said everyone must pay more tax. Meanwhile, a group of economists have questioned whether the ‘black hole’ in public finances must be filled with austerity and tax rises. They said that the £50bn hole entirely disappears if debts are calculated differently. When Rishi Sunak was chancellor two years ago, he used a different accountancy rule to arrive at a government debt figure. Changing it back to what it was before the 2021 Autumn Statement completely removes the black hole, according to the economists' analysis, and will put government debt back on a sustainable footing. Pray for Jeremy Hunt and all members of the treasury to be wise regardless of the accountancy rules they choose to follow.

The Chancellor announced targeted payments to help with the cost of living. The national wage will jump from £9.50 to £10.42 an hour from April; help for energy bills will be extended, but less generous. There will be cost of living support for pensioners, the disabled, and those on low incomes. Means-tested benefits, including Universal Credit, and pensions will rise in line with inflation. Social sector rent rises will be capped at 7% in the next financial year. However, the cap on social care costs due next October will be delayed by two years. A ‘temporary’ 45% tax on companies generating electricity will be applied from January, and windfall taxes on oil and gas company’s profits will increase from 25% to 35% and extend until 2028. The NHS budget will increase in each of the next two years by an extra £3.3bn, and schools will receive £2.3bn extra in 2023 and 2024.

Christmas adverts have started on TV conjuring up sentimentality, nostalgia, and joy. But as the cost of living soars, some have opted for a more muted approach to campaigning this year. John Lewis’s advert, featuring a foster family, was less about buying things and more about kindness to someone else who might need it. But some retail experts warned scenes of bountiful buffets in other ads were out of touch as families struggle with rising prices. Tesco and Lidl have both put an emphasis on price and affordability in their messaging, at a time when many families are facing rising grocery bills. ‘There clearly is a more muted tone this year, which is fitting for the time we're going through,’ said a spokesperson for Mintel.