Britain's public debt load has risen by more than 40% to nearly £2.6 trillion ($3.3 trillion) since the pandemic began, causing concerns about the country's ability to service its liabilities and reigniting questions about its credit rating. The heavy reliance on index-linked bonds and the threat of inflation could further worsen the situation, potentially leading to a negative economic spiral that could last for years. The UK's debt burden is already higher than its entire annual economic output, and without action, it could balloon to three times the GDP over the next half century.
The cost-of-living crisis has gripped British politics, with rising inflation, high taxation, and increased interest rates, though not all Britons are equally affected, leading to trade-offs rather than severe hardship, posing challenges for the government and potential political consequences.
Higher inflation and the COVID-19 pandemic have pushed nearly 68 million people in Asia into extreme poverty, undermining progress towards eliminating poverty, according to a report by the Asian Development Bank.
The UK economy recovered from the Covid-19 pandemic faster than previously thought, with revised data showing that UK GDP was actually 0.6% larger by the end of 2021 than in the final quarter of 2019, erasing Britain's laggard status; however, economists caution that this stronger data does not change the overall outlook for Britain's growth or provide relief to households facing high inflation and rising borrowing costs.
The cost-of-living crisis in Ireland began in September 2021, with inflation hitting a 10-year high and prices for transport, housing, restaurants, and hotels skyrocketing, leading to financial hardships for households in various aspects of their lives such as mortgages, rent, health insurance, food, energy, fuel, hospitality, and waste collection.
Despite increased household wealth in the US, millions of households are struggling financially due to inflation, high interest rates, and rising living costs, which have led to record levels of debt and limited access to credit.
US household income fell by the most in over a decade in 2022, showing the impact of rising costs and the expiration of pandemic relief programs, with the median income dropping 2.3% and marking the third consecutive annual decline, contributing to concerns about the financial well-being of American families.
The U.S. inflation rate has been helped by falling medical costs, but this trend is about to reverse, which could complicate the Federal Reserve's efforts to lower inflation back to pre-pandemic levels. The complex way the government measures the rise of medical costs and the fluctuations caused by the pandemic have contributed to the instability in health-care costs. The upcoming rise in health insurance costs is expected to have an impact on inflation, particularly the core rate that excludes food and energy costs. Economists are divided on the extent of this impact and whether it will hinder the Fed's fight against inflation.
Hong Kong's wealth gap has widened to its worst in over a decade, with the poorest residents struggling to recover from the impact of the Covid-19 pandemic, according to a report by Oxfam. The wealthiest 10% of households earned 57.7 times more than the bottom 10%, up from 34.3 times in 2019, and 20% of the population was living below the poverty line. The report calls for an increase in the minimum wage and the creation of more flexible low-skilled jobs within public bodies to address the gap.
The UK economy has performed better than previously estimated during the COVID-19 pandemic, with growth outpacing Germany and France but lagging behind the US, according to revised official data, although households are still facing cost of living pressures.
The rising cost of living in Ghana, fueled by inflation and economic crisis, is pushing more people into poverty and exacerbating inequality, with low-income households spending over half their earnings on food and informal workers receiving little support, despite being essential workers during the COVID-19 pandemic. The government's failure to implement sustainable reforms and its underinvestment in social protections have contributed to the worsening crisis.
Despite positive economic indicators such as job growth and low unemployment, the perception of a healthy economy is overshadowed by the high cost of living, including inflation, rising housing prices, and increased interest rates.
The economic backdrop faced by Gen Z, including inflation and high living costs, is expected to have a deep impact on their pay expectations and spending habits, potentially pushing prices higher. Young people in the UK have seen their inflation expectations rise significantly, driven by experiences of a cost-of-living crisis during their formative years. This could have long-lasting psychological and economic effects on Gen Z and society as a whole.
Baby boomers, with their healthy finances and high spending, are contributing to stubbornly high inflation in the UK, posing a challenge to Chancellor Rishi Sunak's target of halving inflation this year. Boomers, armed with final-salary pensions and benefited by rising interest rates on savings, are defying economic gloom and keeping the economy afloat in areas such as housing, holidays, golf, and recreation and culture.
Britain's energy crisis threatens to push millions of households into poverty as energy prices remain high and government support has been scaled back, leading to concerns about fuel poverty and excess winter deaths.