Beat the cost of living crisis – go on holiday
As inflation rages, energy bills soar and the pound tanks, what’s a good way to save money this winter? Go on holiday, says Merryn Somerset Webb.
What a thing it must be to unexpectedly find yourself prime minister – or chancellor. What a thing it must also be to find yourself in one of those situation when it’s all going wrong.
Prices in the UK are still rising fast (not just for households, companies are being hit by the energy bill madness too). Economists used to think inflation would peak around 10% – and that was considered a bit out there. Now forecasts of 20% aren’t considered out there at all (analysts at Goldman Sachs are forecasting 22% by next year). Interest rates are set to keep rising (perhaps to an almost historically normal sounding 4% or so). House prices are beginning to stall in response (flattish in July and August on the latest numbers from Halifax).
There could be a sterling crisis under way. The stockmarket isn’t exactly covering itself in glory: the FTSE 250 is down 21% year to date and the latest data from the Investment Association shows money pouring out of UK equities. Total outflows from UK open-ended funds by retail investors come to some £11.5bn this year already. We think there is significant value in the UK equity market (valuations are far from challenging). Clearly not everyone agrees.
Liz Truss would have known as she stepped through the door of No.10 this week that she hasn’t got much time to have a bash at sorting things out. In a sense that gives her a huge opportunity to be radical: with two years left to a general election and her party very behind in the polls what’s the downside (for her at least) to being radical? We look at her first attempts at this in politics, but are also watching to see what might come next.
A good time for a holiday
Tiny silver linings for you. First savings rates have risen a little – it is now possible to get 3.5% on your savings (a mere seven percentage points or so less than inflation!).
Second, the Daily Mail has come up with an utterly brilliant way for you to save money: leave the UK. Not for ever, of course, but for at least a few weeks of what looks like it will be an unpleasantly expensive (and angry) winter.
If you go to Valencia, you can apparently pick up a three-week cruise to Dubai for £775 a head all inclusive. That looks pretty good (too good to be true?) if you consider that the average monthly household budget in the UK based on 2.4 people is around £2,500 – and that’s before taking into account inflation. Otherwise there is a nice looking 17-night cruise from Genoa to Port Canaveral for £749.
Or perhaps, if you want to stay closer to home and cut the travel-to-boat cost, consider a ten-day round trip from Marseille (taking in Lisbon at one end and Sardinia at the other) for just £789. None of these will feel like the most luxurious trip you’ve ever been on (think cheap wine and an inside lower deck cabin), but I’m not sure staying at home is going to feel that good either.