As bad as the inflation picture has been in the U.S., across the pond the experience has been far worse.
In May, the United Kingdom’s year-over-year inflation rate was 8.7%, more than double the inflation rate that Americans are experiencing. Bank of England official Jonathan Haskel neatly summed up the problem while speaking to an audience in Washington, D.C. last month: “The U.K. has a U.S.-style tight labor market and a European-style tight energy market.” One might add to that list that the U.K. also is suffering from runaway food costs.
Over on the Reddit social-media platform, there’s a viral thread on what people are giving up in what’s called the cost-of-living crisis.
Drawing 1701 comments at recent check, many of the responses were quite grim. “All hope,” said one. “Buying a house, ever retiring, the will to get up most mornings,” said another.
One item that kept coming up was streaming services, so watch out Netflix
NFLX,
and Disney
DIS,
“My streaming services, I’m a pirate now,” said one Reddit user.
What Brits call takeaways — takeout food — also was on the chopping block for many. So was alcohol — a big sacrifice for a culture that in many ways revolves around drinking and spending social time in pubs. A particularly expensive brand of butter, Lurpak, got a few mentions. Not that the newly thrifty Brits are necessarily healthier — many gave up their gym memberships, too.
Some took more drastic action, moving north, either within England or to Scotland, while others said they were heading for the Middle East.
To believe the message board, illegal drugs are one of the few products that have not seen inflation-related issues. “[One gram] of weed has been £10 since it seems the dawn of time,” said one user. “I’ve actually found that dealers have been the most respectful vendors in regards to inflation and the cost of living,” said another.
The British pound
GBPUSD,
has gained 4% vs. the dollar this year as the Bank of England has gotten more aggressive in its fight against inflation. The 2-year yield on the U.K. gilt
TMBMKGB-02Y,
also tops that of the U.S.
TMUBMUSD02Y,
by about 30 basis points.