‘We’re in a recession, Ruby.’ I remember when my dad told me this in the middle of a Woolworths stationery aisle after I’d asked him to buy me a fluffy-ended purple gel pen.
12-year-old me didn’t understand what the 2008 financial crisis was, of course, or that the recession it caused led the UK's economy to shrink for the first time since the second world war.
But I knew I didn’t like the sound of something that was coming in between me and this statement writing implement I so very wanted.
Now, as an adult supposedly in the midst of another recession, I’ve been reminded of this day in Woolies.
Thankfully I don’t have a child pulling at my sleeve demanding I buy them unnecessary tittle tattle. But I, like many others my age (25), have just come out of a pandemic. We’re approaching our first ‘free’ summer since 2019. That means holidays, birthdays and festivals.
All the things you should be enjoying in your 20s. But what I can’t seem to shake is this pang of guilt.
While we technically entered a ‘recession’ in 2020, a year which saw the UK experience its worst economic performance for more than 300 years, now there's talk of another recession in the second half of this year if energy prices continue to rise.
Last week, the Office for Budget Responsibility's economic outlook suggested if wholesale energy prices remain as high as markets expect – so don’t rise, just stay the same – energy bills could rise around another 40 per cent in October, pushing inflation to a 40-year high of 8.7 per at the end of this year.
This year prices are only going one way. And that’s up. Tesco meal deals increased from £3 to £3.50 in February. Safe to say the outrage I experienced at the self-service checkout when I discovered this was unbridled.
While we might not have noticed the start of this recession because we were all locked down and therefore unable to spend much, we're certainly going to feel it now.
I booked a return flight from London to Barcelona at the weekend and it cost me £300. I felt insanely guilty about it afterwards and searched ways to roll up my clothes tight enough to avoid getting hit by extortionate luggage costs.
A few days later I thought to myself: "It'll be fine. I'll just save this month." But I quickly reminded myself of all the big birthdays coming up.
After two years in a pandemic, you'd think we'd all saved up enough to spend absolved of any guilt. But for those who didn't manage to live rent-free in their parent's houses for the majority of it and who are on average graduate salaries – £31,257 in London and £29,293 in the UK, according to Glassdoor – it may not feel like you saved much at all.
Particularly in the face of sky-high house prices, 'splashing the cash' feels harder to justify if owning your own property is an eventual financial goal. While family and friends assure me 'house prices will crash soon', I know the supply crisis we currently face means no such thing will happen soon.
Perhaps if Michael Gove finally decides to unveil these much-awaited planning reforms, we'll be onto something. But as far as I'm concerned, these houses prices are here to stay and my savings goals are going to have to get used to them.
That certainly seems to be the opinion of fintech lenders cropping up with the sole purpose of helping first-time buyers boost their deposits with another loan. Ah, the joys of paying off not one but two loans with separate interest rates – which are also rising, by the way.
Then you've got the normalisation of buy now, pay later. Most people have no idea taking out too much finance can stop them from getting a mortgage. So while spreading out a payment or three might seem more affordable, it could seriously scupper your affordability for a house, which is nothing short of ironic.
Young people are up against it, is what I think I'm saying. And while the pandemic is over – kind of – a creeping sense of guilt is taking its place. I don't think I'll be the only one struggling to spend guilt-free this summer.
ruby.hinchliffe@ft.com
