THE UK is currently in the grip of an unprecedented economic crisis, driven by a wide array of factors and with a tangible impact on individual households. The crisis has been largely defined by a steep rise in the rate of inflation; the Consumer Prices Index, the major indicator by which inflation is measured in the UK, had risen to a 40-year high of 9.4% in June.
Further rises are still to come, though, as the Bank of England intimates that inflation could reach as high as 13% by the end of 2022. This astronomical increase has been precipitated in large part by a spike in the cost of wholesale energy, caused by the Ukraine-Russia crisis and exacerbated by the Brexit withdrawal agreement. Though wholesale costs are decreasing, the damage has already been done consumer-side – and stratospheric rises in the cost of fuel and energy have not been mitigated by any corrections in the wholesale market.
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With the sympathetic increase in the cost of the average grocery shop, the story is one of economic hardship. Consumer budgets are ill-equipped to cope with rising prices, and spending patterns are being threatened. Transport in the UK is one of many industries potentially impacted by inflation, but also uniquely placed on the frontlines of UK society. Has inflation affected travel, and does it stand to have a major impact?
Aviation
The impact of inflation has naturally spread to the aviation industry, where growing wholesale costs have combined with post-coronavirus staffing issues to result in unreliable commercial travel. However, this has had a positive knock-on impact on the private aviation industry, which has welcomed increased demand and more travellers.
Private jet prices represent a form of reliability and comfort that current commercial operators cannot offer, as flight delays continue to build. Private enterprises and business travellers make up the majority of migrating customers.
Public Transport
Though there has been a slight shift to reliance on public transport over personal vehicles, transport networks are no less impacted by inflation. Numerous factors have been affected, from service reliability to the fares themselves. Growing inflation has led to a real-term pay cut for the average earner, with private rail firms, in particular, offering reduced rights for staff in new contracts – leading to strike action and overall unreliability.
Personal Transport
The impact of inflation is perhaps most keenly observed in personal transport patterns – in particular, the use of cars to travel and commute. Petrol and diesel prices were among the first to see significant cost increases, as supply disruption and shortages caused demand to spike. The result was the price of diesel breaching £2 per litre for the first time in history.
As a general trend, people have been driving less where possible. The cost of fuel has become prohibitive for many household budgets, with low-cost alternatives like cycling becoming more popular for work commutes. While budgets are small, those in the market for new cars can still take advantage of low-interest rates – with some seeing long-term benefits from locking in a low rate of interest before it rises.