Thread by @faisalislam

While we await handover of power here is an assessment of the Truss trapeze act on the economy, which has become materially trickier during the six weeks she spent defeating Sunak… both situation on ground in households & businesses and in the markets, bbc.co.uk/news/business-…

Thread:

Sometimes we see the developments in the economy through our camera lenses up & down country before they become data points - the pressures we have observed, reflecting reality of 10% plus inflation are astounding and deeply concerning…

Ie having spent the past six weeks traversing the country talking to members at hustings, the candidates may have been shocked at what they found around the corner, even in leafy communities/ Con heartlands as regards cost of living pressures

1/ The surge in food prices is breaking the charitable model of food banks and food pantries that have emerged in almost every town and city.
Not only has demand surged, turning many of last year's food charity donors into recipients of support, but supplies are now a problem…

2/ Many projects are reliant on surplus food stocks from supermarket supply chains. But supermarkets facing massive inflationary pressures, trying to avoid passing on price hikes to consumers, are trimming surplus stock, meaning fewer eg tinned goods available for donations

3/ so in Matlock Derbyshire I met Bev Parker who runs rural charity: “manufacturers are cutting back on supply not over producing so much. So we've got a double whammy of quite a lot of fresh produce that people don't want. And not enough tinned goods, because people want that”

4/ last ref illustrates combination of different strands of cost of living pressures… preferences for food being determined by potential energy use costs.
“people are giving back fresh produce saying can I have stuff in tins. Because I don't want to have the fridge on” says Bev

5. Bev: “we’ve heard of people getting food poisoning from eating food that's not been stored properly because they’ve turned the fridge off”, also people walking miles because they can’t afford the bus fare… some of the customers are from dual income working households

6/ Yesterday in Staffordshire, we met Jo at Stone Community hub

“One of the guys who's on licence from prison, struggling to maintain the cost of his flat actually said he would prefer to go back to prison because he just couldn't see how we were going to afford to live.”

7/ “And another lady was talking about the cost of gas said she'd completely turned her boiler off and wasn't using any hot water and was boiling a kettle. The gas price is not even affordable in the summer for her" Jo told us that they couldn’t even contemplate winter.

8/ in the lead up to PMs resignation I went to Peterlee in Durham, met dual income families growing their own veg, worrying about a crisis worse than the closure of the mines, working families having entire disposable income swiped by energy direct debits. bbc.co.uk/sounds/play/p0…

9/ bottom line - real story in households behind the extraordinary inflation charts we show on our screens. And the crisis goes well up the income scale as mortgage style energy bills.

But story in small businesses also very painful/ existential as face energy contract renewal:

10/ former fuel poverty tsar, the chair of Utilita Derek Lickorish, said that £50 on a prepayment, which ordinarily lasted 12 days, would under current forecasts for next year, last just 2 days. That the UK needs to be on a “war footing” re cost of living, or we risk “Armageddon”

11/ put out this chart on #bbcnewsTen last night showing one of the industry plans for the freeze - having £90bn Tariff Deficit Fund keeping annual bills at £2000 this year & next, cancelling planned rise, repaying into 2030s with bills only slowly declining from that £2000 level

12/ obviously all of the above in this thread happened while bills were at the £2000 level at a time of hot weather, and almost all before it was announced they’d be going to £3549

13/ even so, a £90bn loan or contingent liability and on top of that more direct support for businesses and then the promised NI cut and cancellation of corporation tax rise, and we are well north of £100bn… at a time when borrowing costs topped 3% & sterling weakened too

14/ and this is often missed - while it is broadly expected we are about to get a Pandemic style rescue package, and surely considerable increases in borrowing, this time the BoE won’t be the main customer for any glut of Govt bonds. It will prob be reversing not increasing QE.