When did you last have a good look round your case portfolio and recognise what your business focuses upon and what you are best at? If the answer to that question is 'more than forever ago' we in the NTI newsroom recommend that you do so soon.
Tracee just glanced at one of her screens as she paused on Tik Tok and dried her nails, spotting that inflation of 22 per cent is a predicted possibility if we, as a civilised world, do not get a grip on energy, it sources and the consequences of being held to ransom by a weasel-faced maniac who could, at a push (although we don't think he will) claim to be 'European'. Right about ... now people all over the UK are facing up to the fact that they cannot afford everything they want. In many ways that has always been the case, except that the things they now 'want' are fairly simple commodoties and services; such as going to the gym and ice-cream.
If inflation even gets into the distant suburbs of 22% stark choices are going to have to be made by a generation of people who have never had to make them before. Chicken or beef could well become chicken or bread. The stuff that 20 and 30-somethings considered to be 'essential' will become the subject of difficult choices. Weekend away? Absolutely not. Netflix and chill? Do it without the Netflix. Pudding or coffee? Just the bill, pease.
Many of the things referenced above are considered to occupy the lists of 'discretionary spending'. They are the items we will give up first, even if we don't want to, because we cannot afford them.
Which businesses are most at risk from the discretionary judgment of others? Pubs. Cafes and anywhere where they sell coffee and flapjack for more than two quid. Hotels. Cinemas. Online card shops which produce a service that cost more than a WhatsApp. Gyms. Clubs. Clothing stores. The Disney Channel. Live sport. Almost live music. Ridiculous things such as gift labels and scrunchies, labelled clothing and energy bars. These are all places where, with inflation running between 14 and 22 per cent, and energy bills costing more than the mortgage you don't have, even the quite well heeled are going to stop going and cease buying.
Which of your clients to which you have given advice will be back for more, very soon? Discretionary spending is almost upon us. We will all be looking at the luxuries and extras we would have considered borrowing for before, but the latest figures from the Bank of England show that total consumer borrowing fell from £1.78 billion in June to £1.43 billion last month. Borrowing on credit cards fell to £700 million from £1 billion the month prior and in line with forecasts from private-sector economists. The signs are there.
Interest rates which have been raised six times since last December, are being passed on to borrowers who are already facing record real-income falls. When income falls, choices have to be made. Look around you; who is going to fall first?
