① UK Inflation at Record High
The United Kingdom is currently grappling with the most pronounced inflation surge witnessed in four decades. The soaring cost of living has given rise to a famous adage suggesting that residing in London equates to prosperity, underscoring the dire financial straits many Britons find themselves in. This economic turmoil is marked by the simultaneous ascent of inflation rates and the stagnation of wages, leading to widespread discontent. Across various sectors, workers have taken to the streets in protest.
The UK Consumer Price Index (CPI) experienced an alarming 11.1% surge in October of the previous year compared to the corresponding period in the prior year, reaching an unprecedented 41-year peak. Despite a recent decline, the UK’s inflation rate remains one of the highest among developed nations, with the Retail Price Index (RPI) also registering a substantial 9.1% increase in August compared to the previous year.
In response to this runaway inflation, the Bank of England has incrementally raised the base interest rate on 14 occasions, bringing it to an annual rate of 5.25%. Nevertheless, projections indicate that inflation is unlikely to stabilize until 2025 and beyond, further exacerbating the financial challenges faced by the population.
The average annual salary for workers in the UK is roughly between 44,000 and 53,000 U.S. dollars. This income level is insufficient to cope with the cost of living, so livelihoods are threatened. A doctor from Manchester who works 48 hours a week earns an annual salary of about $75,000, but they say this is not enough to cover living expenses.
UK Chancellor of the Exchequer Jeremy Hunt announced that the country’s minimum wage, known as the National Living Wage, will be raised from £10.42 ($14.06) this year to £11.44 ($15.45) next year. The UK’s minimum hourly wage will rise to approximately $15.88 from April next year, an increase of about $2.20 compared to this year. The age of eligibility for the living wage will also be expanded from 23 to 21 years old.
The UK Treasury emphasized that the increase in the living wage is the third-largest in real terms since the system was introduced, considering the inflation rate.
② The Reality for Britons Earning $23,700 a Year
A young Briton’s reality published in the Financial Times (FT) has sparked controversy. Many Britons responded explosively, empathizing with his story. A man working as a security guard at a university in the UK earns about £10.71 per hour and works 12-hour shifts 16 times a month. In discussing his financial situation, the individual revealed that his monthly income, after taxes, amounts to roughly £1,400. This translates to an annual after-tax salary of about $23,700. He expressed significant concern about making ends meet with this income, noting that the worry often costs him sleep.
He disclosed that his daily nutrition relies on a diet consisting of two servings of oatmeal porridge, noting that he has substituted milk with water. His monthly utility expenses tally up to approximately $68 for electricity and $42 for gas. Additionally, he shared his financial burden of a $933 monthly mortgage payment for the next two years, expressing apprehension regarding the potential surge in interest rates if he opts to extend the loan.
He offered insights into his circumstances, pointing out that while some might question his decision not to seek higher education for a better-paying job, such a viewpoint is understandable. Yet, he emphasized the significance of his role, categorizing his job as essential work, a sector crucial to societal functioning. In the United Kingdom, the phrase “working poor” is increasingly used to describe people who, despite their hard work, continue to struggle with poverty.
③ Cost of Living in London Threatens the Working Class
The cost of living threatening Britons is shockingly high. The monthly rent for a one-bedroom apartment in central London easily exceeds $1,700. With London’s high rents, people have started living on boats in the city’s canals. While the price of a house reaches around $5.3 million, the price of a boathouse is about $41,700.
A single meal costs a basic $25. A hamburger in the UK costs about $21. A haircut costs about $56, and a 10-minute subway ride costs about $4.76.
As the cost of living in the UK has soared, the number of Britons who have starved has also increased. According to a survey last year, one in six UK adults said they have skipped meals to save money. The proportion was even higher among young people, at 28%.
The UK has seen the highest number of subsistence thefts in a decade. Most stolen items were products worth less than $68, such as cheese, meat, and snacks. According to the Association of Convenience Stores (ACS), the number of thefts from convenience stores and other small shops across the UK last year was 1.1 million, the highest level in a decade.
By. Min Jae Kim
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