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.

I don’t think the 2008 one was that bad

It all depended on whether you had a secure job or not. It wasn't the same circumstances we have now with supply chain issues and the cost off living increasing, it was all about borrowing.

I worked for a small company at the time, which did work for lots of small/medium companies, so I got a good feel for what was going on in the world of local business. Every conversation was about cash flow or redundancies. Most of the companies we did work for simply no longer had enough work to sustain themselves, and in some cases couldn't pay their staff. Many of us who still had our jobs were largely unaffected, but the internals of the machine were falling apart. Seeing what was going on from the inside, it was bad.

What we're experiencing now is very different. Economists seems to be less concerned, but I can't help but feel there are so many complex factors involved that things could fall apart pretty quickly.

I don’t think the 2008 one was that bad

The bulk of our work back then was for local Estate Agents - in the days when property details and letterheads were actually printed! - one after one they collapsed and so did 50% of our work. And then the family business had to close.

There's so much riding on the housing market 'working' that I imagine they'll pull out all the stops to ensure people don't fall back on their mortgages. Probably bunging loads of taxpayers money at it, thus kicking the problem down the road....

A lot of economists are very concerned. Especially as the tools to fix this are pretty limited.

Agree with Daz et al above - a lot of money has been slammed into the economy since 2008, and gone straight into places it's not super useful bar keeping things stable. Ergo GDP has grown, but wages have stayed flat and inequality grown. And yes those unhappy trends are worse in the UK - thanks Dave!

There’s so much riding on the housing market ‘working’ that I imagine they’ll pull out all the stops to ensure people don’t fall back on their mortgages.

Housebuilders are now reporting downturns in new-build reservations.

I expect due to mortgage offers being withdrawn, or people deciding to sit tight in their current homes with an affordable mortgage.

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!

Fellow ink monkey here. Every recession since the early 90's has seen me out of work. It gets to the point when you see a couple of unknown suits walking around the company that you assume it's the receivers. Only positive these days is money is so shit that taking a minimum wage job (all I'm qualified for) won't be the hit it once was. Had hoped to hang on to the industry for another 5-10 years before retiring, and current employer seems fairly solid so fingers crossed.

some serious price fixing going on

before the recent U.K. gov policy changes I’d have said this is folks making hay while the sun, ironically, shines.

OPEC are in a tough position given the USA is in energy surplus and oil had a recent low price period.

If only we had had some kind of push to wean us off burning things for energy. 🤷🏻‍♂️ like some sort of impending global problem the U.K. could have taken a strategic and technological lead in.

As it is I tend to agree with folks. Compared to 2008 this looks like a real tricky one.

Perhaps it’s time for some U.K. gov honesty? Clearly a false dilemma, but either ‘we can make a difference. It’s just that we’ve been inept for the past 15(?) years’ or ‘we can’t really make a difference. We just futz around the edges. Buckle up!’

😣

Truss supports no-blame evictions, inflation will cause people to become homeless, many mortgagees will have to sell up, falling prices could mean negative equity, big landlords will acquire more properties, rents will go up due to increased demand, tent cities will appear as in the US. The Tories are now proposing to abolish the need for 'affordable' housing in new developments.
Company directors buy back shares to increase their bonuses, massive dividends have been paid out, money is not going into investing for growth. Rentseeking, the most parasitical form of capitalism, is the way forward for the rich and misery for everyone else.

I expect due to mortgage offers being withdrawn, or people deciding to sit tight in their current homes with an affordable mortgage.

Absolutely - I think you'd have to be pretty desperate to move in the current situation.

people deciding to sit tight in their current homes with an affordable mortgage.

This is exactly what is happening, far more activity in re-mortgaging than in new (i.e. 'moving house') mortgages

I am currently mid way through an expensive house alteration, which was planned for 5yrs, funded by a remortgage.

Currently committed so need to see it through but very concerned in 4yrs when the fixed rate ends. What was originally only a couple of hundred extra a month, which seemed tiny compared to the nursery fees we had been paying will balloon massively.

I worked out we would be very tight if mortgages hit 7% which no one was expecting. I did not factor inflation being 10% and everything else going up hugely.

I’m trying to get the build done as fast as possible to avoid the worst of further increases. Already had the brickies put their rate up from £200 to £225. As a paye I unfortunately have no option to increase my rate as my costs are increasing…. I keep telling myself this is an investment and I haven’t just spent it all on a flash car / big holidays.

We were thinking of replacing our 14 plate Kia next year. That’s on hold. We are not planning any holidays other than camping next year. We were already very frugal with energy, and hopefully the alterations will equate to less usage as it’s insulated much better

I really can’t see how those at the sharper end are going to cope,

I really can’t see how those at the sharper end are going to cope

There will be a huge number of people really, really badly affected.

The Tories are now proposing to abolish the need for ‘affordable’ housing in new developments.

'Affordable Housing' has been a fudge for years.

Many new build estates get passed with X amount then developers go back to planning and get it reduced by a loads because of some trumped-up issue.

The only way to build affordable housing is for the state to get back to building them again. And then not sell the things on with right-to-buy schemes. If circumstances mean you can now afford to buy then go and buy something else and leave your house for someone else starting out.

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?

Wages for folks in public sector, high supply (lots of potential employees) jobs, and those staying in the same job have fallen so far behind! As per other threads, even high demand/low supply jobs seem to have modest salary incentives for recruitment.

The money that could have been wages in for-profit companies has been targeted at ‘share holder value’ in many cases I’d guess.

In public sector I guess it has been a consequence of ‘austerity’ (the ideological kind. Folks certainly felt the real kind) and cost control.

And, yes, many companies have been on the edge. Some will need to close.

I’m already thinking harder on how I can improve departmental productivity and increase the value and volume of work. Cost cutting is possible but unlikely for my department, but … Thankfully the high competition for our skills continues.

Some of the biggest profits are to be made during recessions; ..........price increases of things like fuel, energy, food etc. Disaster Capitalism is very lucrative for those who have power....................That’s at the core of what we’re seein

I survived 2008 until 2016, because fundamentally this isn't correct.

Sure some hedge fund probably made a killing shorting some stocks, but that's not how the actual industries work.

The energy prices (and thus the whole industry) tend to track the global economy but delayed for a few years. If things are going well, there's money coming in, and people get employed to build things. But when the economy goes down, that takes a little while to trickle through to a drop in energy prices, which is then further delayed as projects have inertia and tend to carry on until there's a decision to be made on further funding. So by ~2015 the energy sector reached the point where Shell was closing its own offices making thousands of engineers redundant, at the same time the contracting companies that did the design work for them hit an exponentially worse wall as unlike the producers they don't have an income at all.

By the time I got made redundant in 2016 even the recruitment consultants had gone bankrupt. You could go on job search sites, set the criteria for any job, any level, anywhere in europe, and there was one listed in Germany (bearing in mind I reckon there must have been about 5000 engineers made redundant in the Reading area alone).

For an easier to visualize analogy, substitute energy for most other sectors. If food prices drop farmers might make a little less money, some marginal ones might be bankrupt. But if as a result all farmers stop buying tractors for a few years to save some cash then tractor manufacturers are hit exponentially worse.

The recession itself isn't that big a deal tbf. Recession is mostly an accounting term, and it's not like we were doing particularly well with .001% of growth. But all the stuff that was crushing people before, is still going to be crushing them.

(as a normal everyday person, it matters barely at all whether we're in recession or growth, what matters is where the spoils are going; a boomtime for big business can still see everyone else get poorer, and that's been the driving direction for most of my life)

Except of course that a recession is a good excuse to slash public services and for companies to lay off staff

We have a fixed rate mortgage at 1.6% until 2026 and are lucky to have a monthly surplus. Should I bung that in savings, or overpay the mortgage? We have 15 years left on the mortgage. I expect overpaying on the mortgage is the best bet due to the total size of the debt, despite interest rates increasing.

We've been discussing this. I'd lean to overpaying the mortgage, to help lessen the punch in the face when the deal runs out.

Should I bung that in savings, or overpay the mortgage?

Overpaying the mortgage (so long as you can avoid early repayment charges) is a guaranteed way of saving interest in the long term, but the main thing to be wary of is that you can't get that money back again if you suddenly need it. So while it's (probably) a good idea, make sure you've got your 6 months expenses savings safety net first.

Perhaps it’s time for some U.K. gov honesty?

Good luck with that.....

Was interesting but on the Rest is Politics Podcast last week about Truss at the conference. Admittedly it was said by Alistair Campbell, but was funny nonetheless.

https://podcasts.google.com/feed/aHR0cHM6Ly9mZWVkcy5hY2FzdC5jb20vcHVibGljL3Nob3dzL3RoZS1yZXN0LWlzLXBvbGl0aWNz/episode/NjMzZjA5NjU2MzY4Y2QwMDEyNmZjZmI4?ep=14

If I had an excess I would be keeping it separate from the mortgage and then on remortage I'd be using it to reduce the burden as long as you can do so keeping within any charges

That gives you flexibility

Aren't we partly in this situation now because the powers that be have been kicking the can down the road for the last 15 years? And isn't a lot of the inflation we are now seeing a result of the Bank of England (well, all central banks really) pumping money into the system since 2008? That and dropping the interest rate to 0.25% were supposed to be emergency measures IIRC? Yet here we are only just unwinding that almost 15 years later.

Our economy appears to be based on services and selling ever more expensive houses to each other, all fuelled by cheap credit.

I find it laughable that people blame Truss and Kwarteng for this mess when it's really been 15 years or more in the making. Whether through stupidity or cunning they may have triggered a faster decline, but it surely had to happen.

I'm worried about how this might affect me and mine, and have great sympathy for those that are on the edge already, but I think as a nation we need to take some pain and learn to live within our means.

We have a fixed rate mortgage at 1.6% until 2026 and are lucky to have a monthly surplus. Should I bung that in savings, or overpay the mortgage? We have 15 years left on the mortgage. I expect overpaying on the mortgage is the best bet due to the total size of the debt, despite interest rates increasing.

https://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator/

this now includes a calculation if you are better to save it or overpay based on the relative rates.

if you are on a low fix and can get a decent savings rate, I think the balance has shifted to saving.

make sure you’ve got your 6 months expenses savings safety net first.

😂😂😂 Oh, wait, you’re serious? How many people under the national average wage do you think have 6 days saved, never mind 6 months?

Our economy appears to be based on services and selling ever more expensive houses to each other, all fuelled by cheap credit.

Yup!

And

How many people under the national average wage do you think have 6 days saved, never mind 6 months?

How many people under the national average wage do you think have 6 days saved, never mind 6 months?
FTFY

Well yes, but I didn’t want to be over dramatic.

And isn’t a lot of the inflation we are now seeing a result of the Bank of England (well, all central banks really) pumping money into the system since 2008?

Short answer: No.

The longer answer is that inflation didn't move in the 12 years QE was used to stabilise the economy post-2008. Then covid happened and we experienced supply side shocks which affected global supply chains resulting in higher prices. Then Ukraine happened which created even bigger supply side shocks in energy and fuel price inflation. Add those two things together and we are where we are.

The inflation we have now has nothing to do with the amount of money in the economy. There is too little money in the economy as a whole, and even less in the real economy (excluding offshore assets held by billionaires and corporations). The medium term danger is not inflation, it's depression and potential economic collapse. You're worrying about the wrong thing basically.

Aren’t we partly in this situation now because the powers that be have been kicking the can down the road for the last 15 years?

There a few big factors at play, that is certainly one, but then it is compounded by brexit, Covid, and the Russian war on Ukraine.

Two of these four big impacts were easily avoidable, self inflicted injuries, if you like... The other two are global issues that the the UK as a country, could have coped much better with, without the added economic antagonism of the easliy avoidable two.

One crisis is managable, but four heavy weight crises at the same time, nope.

I find it laughable that people blame Truss and Kwarteng for this mess when it’s really been 15 years or more in the making. Whether through stupidity or cunning they may have triggered a faster decline, but it surely had to happen.

Replace "Truss and Kwarteng" with "Tories" - and they've been in for +12 years.

Replace “Truss and Kwarteng” with “Tories” – and they’ve been in for +12 years.

Indeed, but lack of infastucture investment goes on before that time into previous labour governments too.

When faced with the current 'perfect storm' of ecomomic, environmental and socially damaging scenarios, the UK would need a team of elite, perhaps the worlds best, project managers, all working TOGETHER toward common long term goals in government.

Then I look at the current government, and I find it difficult to envisage.

team of elite, perhaps the worlds best, project managers

The A-team theme tune just went through my head

If you have a problem, if no one else can help, and if you can find them, maybe you can hire... the A-Team.

One crisis is managable, but four heavy weight crises at the same time, nope.

^^^^that.

Although the rest of Europe is facing a crisis, but not quite as acute as the UK, one of those factors obviously not being an issue.

Oh, wait, you’re serious? How many people ...do you think have 6 days saved, never mind 6 months?

probably not many, but

We have a fixed rate mortgage at 1.6% until 2026 and are lucky to have a monthly surplus.

he is one of them, and is asking how best to utilise his good fortune safely/effectively

Oh, wait, you’re serious? How many people under the national average wage do you think have 6 days saved, never mind 6 months?

I'm reasonably confident that the person asking what to do with their 'monthly surplus' (which is the question I was answering) does not fall within this group.