Nostalgia is often seen through rose-tinted glasses, the good old days!
Remember in the 70’, disco’s flared trousers, the Queen’s s Silver Jubilee, Man & C&A, Inflation running between 9% and 24% annually. In fact, 9% was considered low!
So it is a minority now of people in Britain that can remember the actual life of living with high inflation. This also applies to businesses, as rising inflation and interest rates appear to be a new phenomenon.
Age gives you perspective, age gives you experience, expertise and knowledge.
This is called crystallized intelligence, and it keeps getting better, you have a full collection of T shirt’s, you have been there, and done that.
Now, I could write about froth and non-events, but I consider that someone has to simply set out what lies ahead. I was told if you know what you are facing, you are halfway to overcoming the problem.
Back in early February, we wrote a post saying that inflation would be here and would rise before almost anyone else was flagging the topic up.
Today the economy is facing its biggest challenge since 2008, possibly worse. When the CEO of JP Morgan says, “ there is a hurricane out there down the road coming our way”, he would have looked carefully at the economic forecasts before making that statement.
The OECD on Wednesday forecast that the UK economy will grind to a halt next year.
Last month, the governor of the Bank of England, Andrew Bailey told MPs he was unable to stop inflation from reaching double digits this year. “To forecast 10 per cent inflation and to say there isn’t a lot we can do about it is an extremely difficult place to be,” he said. “This is a bad situation to be in.” Enough said.
The time has come for serious and grown-up politicians, not spouting soundbite trivia for the media, and to use the tools they have available to help the economy remain stable, and assist those who need help.
It requires bold, measured and considered steps to be put in place, not tinkering around the edges.
Time is not on our side, a recession is perhaps only a few months away, The clock is ticking, and ticking loudly.
So, how can we face this together?
Any future investment needs now to be cautiously and taken advisedly.
With many contracts for broadband or other utilities, they normally add CPI or other nominal bases at a rate per annum. As we progress through the year, these increases will accelerate.
Bearing this in mind, leasing or any fixed-price finance contract will be the ideal way to obtain the equipment that you require.
With inflation rising and remaining high for at least the next year or so, by utilising any fixed price and fixed term contract is ideal as the real purchasing power of the rental will decrease as inflation erodes the rental.
The option of refinance for hard assets is another way to adjust your monthly costs pragmatically and sensibly. This will lower your monthly repayments by spreading the term over a longer period.
So in summary, the light is a train in the tunnel, but by prudent adjustments taken early enough, there is still time to change track.
Oak has come through four recessions, one pandemic, and Brexit in the last thirty years. That was not achieved by fluke or luck.
If you have also discarded your rose-tinted glasses, and need a serious discussion with like-minded people, you know where to find us.