As the summer comes to an end, a cool Autumn and a bitter Winter arrives. These seasons are followed by a growing cost of living crisis for the majority of the UK. The biggest factor to this national crisis would be the cost of energy bills increasing. Now the UK is in a recession, could the public suffer even more from this crisis?


There are various causes for the current cost of living crisis. It could be argued that it started from the 2016 decision to leave the European Union. The state Brexit has left the UK effectively results in higher prices. The UK is currently in a recession as well as recovering from damage caused by the Covid-19 pandemic. Overall, demand in the economy is low due to higher prices. Furthermore, the conflict between Russia and Ukraine as well as Brexit is causing trade issues for the UK as imports are becoming more expensive.Moreover, the currency will depreciate which consequently reduces purchasing power for consumers.


How is the current economic crisis affecting people? The CPI Inflation rate rose by 9.9% in August 2022 which increases the prices for consumers significantly in the UK. Due to the conflict with Russia and Ukraine the price of petrol has increased. Although the average wage has increased by 5.4%, the real wage increase has fallen. The interest rate in the UK was 2.25% in September 2022 and is forecast to rise until the end of the year. The Bank of England are increasing interest rates to encourage the public to save and to appreciate the pound. However, this means the cost of borrowing increases, therefore people's mortgage interests may be affected as well.


The previously elected Prime Minister Liz Truss aimed to transform Britain into an "aspiration nation". Hopefully, the policies the government have recently implemented can function efficiently to combat the negative economic effects of Brexit, Covid-19 and the Russia/Ukraine conflict. Ultimately, the policies should leave the public with a sufficient disposable income to spend more and stimulate economic growth, which should help the UK economy climb out of the recession for 2023.