Dear MEL Topic Readers,
Financial anxiety: The alarming side effect of inflation
In 2022, the prices for goods and services in the USA, UK, and EU average rose 7.0%, 9.2%, and 8.3% respectively over 2021. These rates of inflation were the highest in these economies in decades, which were driven by the war in Ukraine, supply chain disruptions, and strong consumer demand. The inflation rate is slowing down somehow to 3.7%, 4.8%, and 5.4% respectively in 2023 over 2022. But over two years from 2021 to 2023, prices rose 11.0%, 11.4%, and 11.4% in these economies. Food and energy prices rose higher than other sectors, which posed a disproportionate impact on low-income households, who spend a larger share of their income on these essential items. Also, central banks have been raising interest rates in an attempt to bring inflation under control. As a result, the average mortgage rate rose 2.8% in the USA, 3.3% in the UK, and 2.5% in the EU just in these two years. This means the monthly mortgage or the rent went up even further, especially in popular districts. So, unless the income increased more than or at least as much as the cost of living, life became harsh, especially for those whose income is spent mostly on daily necessities. You can assume this level of financial pressure and anxiety for the future creates mental stress, worry, and even dysfunctional behavior.
Read the article and learn about what inflation could cause beyond financial stress.
https://www.bbc.com/worklife/article/20231005-financial-anxiety-the-alarming-side-effect-of-inflation
Financial anxiety: The alarming side effect of inflation
In 2022, the prices for goods and services in the USA, UK, and EU average rose 7.0%, 9.2%, and 8.3% respectively over 2021. These rates of inflation were the highest in these economies in decades, which were driven by the war in Ukraine, supply chain disruptions, and strong consumer demand. The inflation rate is slowing down somehow to 3.7%, 4.8%, and 5.4% respectively in 2023 over 2022. But over two years from 2021 to 2023, prices rose 11.0%, 11.4%, and 11.4% in these economies. Food and energy prices rose higher than other sectors, which posed a disproportionate impact on low-income households, who spend a larger share of their income on these essential items. Also, central banks have been raising interest rates in an attempt to bring inflation under control. As a result, the average mortgage rate rose 2.8% in the USA, 3.3% in the UK, and 2.5% in the EU just in these two years. This means the monthly mortgage or the rent went up even further, especially in popular districts. So, unless the income increased more than or at least as much as the cost of living, life became harsh, especially for those whose income is spent mostly on daily necessities. You can assume this level of financial pressure and anxiety for the future creates mental stress, worry, and even dysfunctional behavior.
Read the article and learn about what inflation could cause beyond financial stress.
https://www.bbc.com/worklife/article/20231005-financial-anxiety-the-alarming-side-effect-of-inflation
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