The economy has pulled through the disastrous effects of the Covid-19 pandemic and the Ukrainian war with inflation decreasing from 9.4% in fourth quarter of 2022 to just 3.1% in July. But despite economic indicators returning to normality, 60% of Scots are still worried that the cost of living is not easing.
According to an online survey carried out by YouGov on behalf of the Scottish Government, the two most common concerns Scots will be mindful during the coming year are household finances and the cost of groceries, accounting for 35% and 31% respectively. The two next most common issues will be energy prices and inflation, both marking 26% of the responses.
Concerns about household finances dominate across all working-age groups with more than 40% of responses from each age bracket, except for those aged 55 to 64, where the figure is 33%.
Furthermore, confidence in the Scottish government's ability to solve these issues is low. Only 36% of Scots believe the government will work in the best interests of the public to solve issues related to the cost of living versus 56% who have a pessimistic outlook.
Even as economic indicators gradually recover to pre-pandemic standards, the prevailing attitude toward the cost of living may reveal deeper issues than just public perception.
Overall, the UK average household price index increased by 2.5% in June, down from 4.5% in March. Among income groups, households with the lowest earnings saw the smallest rise in prices at 1.7%, whereas the highest-earning households faced the steepest increase at 3.3%.
Analysing by tenure type, households with mortgages or similar financial obligations experienced the largest price hike at 3.7%, primarily due to rising interest rates. In contrast, outright homeowners saw the smallest increase at just 1.3%.
Furthermore, the rise in costs is not just limited to households and consumers.
According to the Business Insights and Conditions Survey, also carried out for the Scottish Government, 19.8% of firms reported an increase in the price for goods and services in June compared to May. In the same period 10.8% of businesses reported increasing their own prices charged to consumers.
In August only 9.3% of businesses expected to increase their prices, marking the lowest figure since April 2022 and indicating a shift back towards normality. However, 17.4% of Scottish businesses were also worried about falling demand for goods and services, and this appears a valid concern.
From the start of the year to June 2024, 47% of Scots reported having to reduce energy consumption in their homes. More than half - 53% - reported spending less on non-essential activities and goods, and 13% claimed to have cut back on essential items to put less strains on their household finances.
READ MORE: Pay growth slows to two-year low as jobless rate edges down
The latest employment figures released yesterday by the Office for National Statistics suggest that these concerns may persist in the foreseeable future.
The total number of payroll employees in the UK fell by 0.2% in August representing 59,000 jobs. A closer examination of Scottish data reveals that every region of the country has experienced a slight decline in payroll employment compared to July, indicating that the financial pressure on household will continue.
Umar Qayum is a data analyst with s1jobs
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