How the Cost of Living crisis is affecting us.
Britain is currently awaiting the prospects of a long recession consequently after the economy shrank by 0.2% in the three months before September. The Office for National statistics displayed a harsh foreseeable future of how the economy will look. Activity in the service sector has been stagnant with very little movement with zero growth other the quarter due to a decline in consumer spending as many people combat the mounting pressure from the cost-of-living crisis. Growth in the construction sector has steadily slowed as factories experience a lack of manufacturing as businesses continue to struggle with supply chain difficulties and shortages in key materials.
The bank of England is expecting the latest gross domestic product figures to be the beginning of a prolonged UK recession as rising interest’s rates and the cost of living take their toll. Another negative growth figure for the final three months of 2022 would confirm a technical recession. Jeremy Hunt stated that Britain was facing a period of ‘extreme turbulence’ he then continued to say, ‘fundamental resilience of the British economy is cause for optimism in the long run- I am under no illusion that there is a tough road ahead- one which will require extremely difficult decisions to restore confidence and economic stability.’
The cost of living continues to overwhelm many people around the country with many people being torn between paying for gas or electric as the two options are just too much to pay for. The choices between eating and heating can have extreme severe effects on mental health. University leaders are becoming increasingly concerned with how this is affecting students, with many students being offered support around the country at different universities. Across the UK maintenance loans are lower in terms of last year according to save the student a money site that conducts an annual national student money survey.
The institute for Fiscal Studies has challenged that the anticipated inflation means the value of maintenance loans for students from low-income backgrounds will drastically suffer. Universities are calling for immediate increase of maintenance loans that align with the current inflation crisis as well as the return of maintenance grants in England.
The government have stated that decisions “will have to be taken alongside other spending, priorities, to ensure the system remains financially sustainable”
Renting is the sector in which many students lose a lot of their money too as most of the time bills are not included. With bills being included it can take less of the strain away maybe more so previously before the rising costs of gas. With gas now being inconsiderably more expensive it becomes harder for students to afford rent as gas is constantly on the rise. Food prices are also increasing drastically which also brings another added pressure for students to juggle around rent.
The NUS published its cost-of-living Research in November 2022 and state that statistics show 4,500 UK students in October of this year. Found that over a quarter of students had less than £50 a month left after paying rent and bills. This statistic is incredibly drastic and with this information I felt that I had to do my own research and interview some students to see what they had to say on this matter.
Many students brushed it off laughing as if it was all a big joke, but I sense this is a coping mechanism that is at play due to the severity of the situation. One student I interviewed stated that she was an international student and had no access to family in the UK and was solely relying on more shifts at work and money that she was getting from her parents because without it she wasn’t sure what she would do. She stated that she is fearful for her future after university also because with cost of living increasing it makes it incredibly difficult to even have the financial ability to rent out after university. This impending looming fear is taking a toll on students around the country. You can catch these interviews online on our covfeed website.
It is not only students facing the harsh realities of the crisis though as charities are also holding the short straw regarding the crisis. It is said that many charities will be in positions to close in the new year. Foodbanks are struggling, due to people not having the money to donate as frequently, which is taking a toll because those that rely on food banks aren’t having access to many supplies since everyone is in need of supplies. Ian Mclintock from the charity Excellence Framework said “we don’t expect to see any significant recovery until 2024, and we think that we may see significant levels of insolvencies and if a charity becomes insolvent it will not open again until the recession is over” this is a devastating statement to hear but we should prepare for the worst.
Catch the story live on our news channel covfeed.