While many hoped the beginning of 2022 would see the end of the pandemic, instead it seems to have provided the start of the cost of living crisis. Millionaire businessman and current chairman of the InterQuest Group, Gary Ashworth, shared his insight on what might lie ahead and how consumers can stay afloat for the next 12 months.
2021 ended on one of the most economically turbulent notes seen since the very start of the pandemic.
As inflation hit a record high, the Bank of England base rate finally increased and the energy supply crisis struck fear into the hearths of households across the country.
However, in times like this often the best solution is prevention, which is why Mr Ashworth noted four specific areas that could see the biggest change levels due to the pandemic, what this means for consumers and how they can combat it.
Mr Ashworth has had his fair share of experience across a variety of business types and economic markets, having founded or backed over 30 businesses in his career.
He began “2022: The year of eye watering wage inflation.”
This is certainly no surprise for any economically-savvy Brit as expectations for a skyrocketing inflation rate have been rumoured for months.
However, Mr Ashworth shared some behind-the-scenes insight on the surprising potential cause of this; employment.
He explained: “We are working in an economy of full employment. The small percentage of the unemployment reported in Government figures is made up of people who are changing jobs or don’t want to work.
“When you combine the skill shortages we are suffering as firms switch to investment and growth mode in a post Brexit and almost post Covid economy, with the people who’ve had a change of heart about their job or have returned to other parts of the world to work, then we are facing a perfect storm.”
Individuals have already seen the direct impact of chronic worker shortages when the HGV driver issues first surfaced.
Majority of the service sector are also experiencing similar shortages as more people pursue careers in other companies and industries.
This has been noted as ‘The Great Resignation’ as more people turn to careers that offer more than just making ends meet.
Mr Asworth noted that companies are not oblivious to this trend: “Companies are finally realising that they need to look after their people and we are regularly seeing increases of up to 20 percent of base salary plus promises of equity in some cases and a host of benefits including flexible working.”
This will also likely see environmental responsibility and mental health professionals being integrated into “the DNA of responsible employers” as more prospective job candidates demand this.
He noted that workers who “want to make their mark” will steam ahead as 2022 offers them a “golden opportunity” to do so as the ball is now in their court.
While this all appears to be a major win for the working class, this leads to a different type of inflation; hype-wage inflation.
Mr Ashworth explained: “‘More pay now’ is a double-edged sword though because your pension is unlikely to keep up with inflation and depending on age and circumstances, may leave you worse off in the long-run.”
He cautioned: “Be careful what you wish for.”
For investors, Mr Ashworth’s 2022 advice is clear and simple: “Buy airlines, hotels and leisure companies into any dips and sell them as the markets bounce back.”
Many have coined onto this idea as the travel industry has seen sharp falls and rises during the pandemic depending on restrictions.
However, it must be noted that every investment has capital at risk and no outcome is guaranteed.