Netflix’s share price initially dropped close to 20% on the news that it had lost 200,000 subscribers globally during the first quarter. Wall Street had predicted the company would gain 2.5 million subscribers over the period. In the current quarter, Netflix believes it will lose 2 million global subscribers.   

Netflix has blamed its sudden drop in subscribers on a range of factors, including increased competition, the cost of living crisis which is leaving households with less disposable income, and the ongoing conflict in Ukraine. 

In a statement to investors, the streaming giant said: “Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally. However, our relatively high household penetration – when including the large number of households sharing accounts – combined with competition, is creating revenue growth headwinds.”

Inflation is expected to rise again in April, possibly over 8%, due to the 54% increase in the energy price cap at the start of the month. 

Record-high increases in vehicle fuel prices pushed inflation higher. Average petrol prices sat at 160.2p per litre in March 2022, compared with 123.7 pence per litre in March 2021. Diesel prices hit 170.5p per litre in March after Russia’s unprovoked attack on Ukraine raised oil prices. 

Gas prices, meanwhile, were 28.3% higher in March than a year ago, with electricity up by 19.2%. These figures do not include the recent increase in the energy price cap. 

Addressing the UK’s spiralling cost of living crisis, Chancellor of the Exchequer Rishi Sunak has said, “I know this is a worrying time for many families, which is why we are taking action to ease the burdens by providing support worth around £22bn in this financial year, including for the most vulnerable through our Household Support fund.”

"We're also helping as many people as possible into work – the best way for families to gain economic security in the longer term."

According to new findings on jobs from KPMG and the Recruitment and Employment Confederation (REC), the average salary awarded to new permanent employees went up more last month than at any point since records began in October 1997. 

The jump reflects the huge pressure soaring prices are putting on employers as inflation sits at a 30-year high. According to the findings, overall vacancy growth reached a six-month high.

Typically, sharp wage increases would be a point of celebration for employees, but soaring energy prices and inflation mean that most will still suffer as the cost of living continues to spiral. 

"We can clearly see that labour and skills shortages are driving inflation in these latest figures," commented Neil Carberry, chief executive of the REC. 

“Starting salaries for permanent staff are growing at a new record pace, partially due to demand for staff accelerating and partially as firms increase pay for all staff in the face of rising prices."

According to the government, the tax increase of an extra 1.25p in the pound will help pay for £39 billion more spending on health and social care across the next three years. 

Plans to increase National Insurance contributions were announced by the government back in September. Amid the spiralling cost of living crisis, the move by the government has faced widespread criticism. 

Instead of paying National Insurance contributions of 12% on earning up to £50,270 and 2% on anything above that, employees will now pay 13.25% and 3.25% respectively. Meanwhile, those who are self-employed will see their rates go up from 9% and 2% to 10.25% and 3.25%. 

Frances O’Grady, the general secretary of the TUC, has urged the government to offer more support to UK households: “With energy bills set to shoot up by £700, and by hundreds more in the autumn, many households face being pushed into the red [...] Ministers must do far more to help people get through this cost of living crisis.”

The TUC said that pay and benefits will be “swallowed up” by higher bills and 30-year-high inflation, estimating that energy bills will increase at least 10 times faster than wages this year.   

The TUC has called on Sunak to announce fresh economic support, including new grants paid for by a windfall tax on energy company profits, an increase to the minimum wage to at least £10 per hour, and a boost in Universal Credit.

“People shouldn’t be struggling to cover the basics, but millions of families have been pushed to breaking point by spiralling bills and soaring inflation,” TUC general secretary Frances O’Grady. “This is a living standards emergency. Rishi Sunak must come back to Parliament and present an emergency budget. We need a proper package of economic support for families.”

Across the week, protests against the spiralling cost of living are scheduled for various parts of the country, including Newcastle, Manchester, Liverpool, Peterborough, and Cambridge. 

Ian Allinson from Manchester TUC, said: “We can’t go on like this. The government can find money when it wants, wasting billions on useless PPE and writing off loans. If we stand together we can prevent the government, employers and landlords from driving more people into poverty.”

Speaking in the House of Commons on Wednesday, Sunak pledged support to the UK’s hardest-hit families and said he was committed to building a “stronger, more secure economy for the United Kingdom.”

The Chancellor announced a cut to fuel duty to combat spiralling prices at petrol pumps after Russia’s unprovoked attack on Ukraine further exacerbated costs. There will be a temporary 5p per litre reduction until March 2023, a rate cut that is the largest on record. 

However, Shadow Chancellor of the Exchequer Rachel Reeves said that households require more than a temporary 5p reduction: “Even a 5p reduction in fuel duty will only reduce filling up the car with petrol by £2. So, I don't think that really rises to the scale of the challenge," Reeves said.

In addition to these measures, Sunak also announced that the Government would be pausing VAT on energy efficiency measures such as solar panels and heat pumps for five years. Meanwhile, the Household Support Fund will be doubled to £1 billion from April. The extra £500 million will allow councils to further support low-income families. 

The Resolution Foundation claims that uprating benefits by 8.1% rather than the planned 3.1% to keep up with inflation would be far more beneficial than abandoning the government's planned national insurance increase. According to the thinktank, this would deliver, “four times more support to the bottom half of the income distribution per pound spent, than scrapping the rise in national insurance contributions (NICs).”

The Resolution Foundation’s report suggests that scrapping the 1.25 percentage point rise in national insurance contributions for employees and employers would lead to half of the gains going to the richest fifth of UK households. While an 8.1% rise in benefits and pensions would set the government back approximately $9 billion, it would see three-quarters of the support go to people in the lower half of UK incomes.

The Resolution Foundation’s recommendations come as its principal economist, Adam Corlett, warns that “rapidly rising inflation is on course to bring about the biggest income squeeze families across the UK have faced since the 1970s [...] Low-to-middle income households will be hardest hit by the cost of living squeeze, especially when the energy price cap rises and should therefore be the priority for support.”

A new study by the Resolution Foundation suggests that annual heating bills for families living in the UK’s 4.2 million E-rated homes will increase by a minimum of £320 more than those living in EPC C-rated homes when the price cap goes up in April. Meanwhile, those living in the UK’s 1.5 million F-G-rated homes are set to see a surcharge of £390. In total, the cost across all D-G-rated homes is expected to hit £3.9 billion.

There are currently government plans to better insulate private rented properties by requiring all homes to meet a C-rating by 2028. However, at present, these plans do not extend to homeowners. For low-income homeowners, this will prove particularly challenging, the report warns, with 72% of this group needing to cover the costs of home improvements. 

While many are fearful of the price increases that April will bring, costs will likely rise again in October. According to a report by Investec, bills could top £3,000 a year at this point, due in part to the conflict in Ukraine.

Except it hasn’t been like that. Not even a little. The UK is in the midst of its “weakest decade for pay growth since the 1930s”, according to a report by the Resolution Foundation, a think tank. Meanwhile, the cost of living in the UK is at its highest since September 2011, according to the Office for National Statistics (ONS). Then there’s inflation. This almost hit a 30-year high of 5.4% in December. But the great compounder of peoples’ travails is the energy crisis. In 2021, a typical home was paying around £1042 for gas and electricity per year, in April – when the price cap changes – that figure is likely to increase to £2000.

Crises require collaboration

People are hoping that governments, central banks, and energy companies will step in with measures to alleviate the spate of issues facing households. The chancellor's announcement to provide a repayable £200 discount on bills and a further £150 council tax rebate for most homes in England will serve as some comfort, but the majority will still face a shortfall. Is the right solution for people to quietly struggle? Of course not. As the situation worsens, we might anticipate a wave of radical creativity and activity from citizens. We know from experience that catastrophes are mobilising moments, they spark new thinking, collaboration, and help knit society together.  Consider the pandemic – a single emergency inspired 436,000 people to join the NHS Volunteer Responders Programme. The service reckons these people carried out about 2-million covid-associated tasks. Then there was all the clapping and banging of saucepans in the street to celebrate the efforts of health workers - crises are traumatic, but they unite.

Take the power back

It’s easy to see how citizens might mobilise in response to covid – delivering essentials to quarantining neighbours, staffing a vaccine centre, or just being conscientious when it comes to handwashing and mask-wearing. But the issues at hand require more thought. What can people do in response to soaring energy prices and inflation? The answer might lie in the rise of a consumer-centric energy market. We are currently seeing the first phase of this with a year-on-year increase in solar panel installations. There is room for growth, as of 2020, 970,000 UK homes are using them, according to government figures – that’s only 3.3% of the country. Further along, it’s possible that citizens will tire of paying huge prices to huge companies and opt for creating energy themselves. This could see the birth of localised power co-operatives, where energy is produced peer-to-peer. New, low-cost and easy to use technologies will be key to making this revolution happen in the coming years. 

In the short term, the UK is staring down the worst set of circumstances since the financial crash of 2008. But if government inaction and industry stagnation lead to an era when people are more conscious of their own collective power for social change, the twenties might roar at last.

About the author: Matt Hay is the founder and CEO of Bulbshare, a company on a mission to solve the world's biggest social and commercial problems through the power of community collaboration.

The Office for National Statistics (ONS) announced Consumer Prices Index (CPI) inflation hit 5.5% in January, with wage growth lagging significantly behind. 

In comments largely interpreted as a rebuke to Bank of England Governor Andrew Bailey, the Labour leader said it is “very difficult” to tell people they are not entitled to request pay increases from their bosses. 

Earlier this month, Bailey suggested that workers should not ask for significant pay rises in order to avoid fuelling the rise in inflation. 

Starmer has called on the Conservative government to take action to ease the strain on household finances, including scrapping the national insurance tax increase planned for April which coincides with the energy price cap increase. 

“The Government is forever saying these are forces beyond its control, that it can’t do anything because this is all global,” said Starmer. “Actually, those tax increases are the Government’s own deliberate policy and half their own side don’t think they’re right.”

Labour is also calling for a windfall tax on oil and gas companies that have benefitted from rocketing global prices in order to help reduce consumers’ energy bills.

According to the most recent data from the Office for National Statistics (ONS), wage growth came in at 3.6%, down from a previous 3.8%, ramping up pressure on incomes amid the cost of living crisis.  

Wage growth lagged behind inflation, which reached 5.4% in the 12 months to December. By April, this figure is expected to hit 7% amid the lifting of the energy price cap. 

Allowing for recent rises in consumer prices, real total pay dropped in the year to October-December 2021. Excluding bonuses, average wages were down 1.2% — the biggest decline in nearly 8 years. 

“The squeeze on firms’ finances from high inflation, soaring energy bills and the looming national insurance hike is likely to weaken job creation and further restrain pay growth in the coming months,” said Suren Thiru, head of economics at the British Chambers of Commerce.

“With high economic inactivity indicating that many people have left the jobs market altogether, chronic staff shortages are likely to weigh on the U.K. economy for a sustained period.”

The ONS’ latest figures come as UK unemployment remained steady at 4.1% during the quarter, a figure which sits above pre-pandemic levels of 3.8%. The highest unemployment rate was in the North East of the country, at 5.6%. Meanwhile, the lowest was in Northern Ireland at 2.7%. 

The move by London’s busiest airport is part of the “Heathrow 2.0: Connecting people and the planet” strategy, under which Heathrow has pledged to build back better and greener, addressing both environmental and social challenges. 

Under the strategy, Heathrow will extend the London Living Wage to all 1,300 workers in its direct supply chain. The pay rise will provide a total boost of around £4.5 million for airport employees at companies such as outsourcer Mitie. 

“We are delighted that Heathrow has extended their payment of the London Living Wage to now include everyone within Heathrow’s direct supply chain. Heathrow’s move will provide a stable and secure rate that will ensure over 1,300 workers and their families earn what they need to get by. In the backdrop of rising costs of living and spiralling inflation, this extra financial buffer will prove even more important,” said Katherine Chapman, director at Living Wage Foundation. 

“We all ought to earn enough to support our lives, and I would encourage any business able to do so to consider accrediting with the Living Wage Foundation.”

Last month, store employees at supermarket Sainsbury’s and retailer Argos also saw their basic hourly pay increase amid the rapidly increasing cost of living.