In this lesson, I’m going to help you learn a lot of unfamiliar English words that are in the UK news right now. I will explain what they mean and how to use them in everyday English conversations. While you listen and learn, I will also explain why people are so worried about the cost of living in the UK. So start listening and find out what us British are so worried about.
The cost of living going up is a problem for everyone. It’s not just something happening in the UK news. You can use vocabulary from today’s story on an ESL or IELTS test or just to join in a conversation with your English-speaking friends.
If you're a new listener, congratulations, you’ve found a great way to improve your English language skills. I’ve got some expert advice for you near the end of the podcast. Have fun!
Unfamiliar Congratulations Onomatopoeia Economics Crisis Retail Inflation Fuel
If you take an IELTS test or similar English language test, then it’s essential to know some of the vocabulary for Economics. You’ll need to know what words like ‘manufacturing’ or ‘the retail sector’ - what they mean. You may even need to write essays on this kind of subject. So how do you best learn this material?
Today, I’m going to try to explain, to ‘unpack’ a current news story in the UK, something which probably is happening in your country too - and I’m going to give you practice with some of the more common words and vocabulary around the subject of economics. So I’m going to take a current news story - and it’s therefore informative as a podcast and it’ll give you this excellent vocabulary practice at the same time. What could be better?
Oh and don’t forget. If you enjoy this podcast, and you’re listening on one of the many platforms that Adept English is available on, please give us a review! Help us grow and help more English language learners find us. Here goes.
Hello, I’m Hilary, and you’re listening to Adept English. We will help you to speak English fluently. All you have to do is listen. So start listening now and find out how it works.
If you listen to the news in the UK at the moment, you’ll hear the phrase ‘Cost of Living Crisis’ a lot. People on the news, and politicians are always inventing new phrases. These phrases are an attempt to sum up a situation - and sometimes they’re trying to emphasise aspects of a situation, perhaps to suit their own purposes.
The more dramatic a news story, the more people watch it - or the more dramatic the headline in a newspaper - the more newspapers are sold. Or if it’s online, the more dramatic a news headline, the more ‘clicks’ a news story gets. A ‘click’ is a sound word - that’s called an onomatopoeia - so a word which sounds like what it is.
So ‘a click’, CLICK refers to the noise that your computer keyboard or your mouse makes, especially as you click on a news website, on a YouTube video or any kind of link that opens up a whole new webpage. That is ‘a click’. So if something online gets lots of ‘clicks’, that means it’s really popular, lots of people look at it, lots of people read it.
So the ‘Cost of Living Crisis’ is a phrase that you’ll hear all the time in the UK at the moment. The ‘cost of living’ is an established phrase - meaning the cost of all the necessary things that you need to live. That’s housing, food, electricity, petrol. A summary of those things is commonly referred to as ‘the cost of living’.
In a previous podcast - that’s 451 -I’ve talked about the different measures that the UK government uses to measure the ‘cost of living’. Remember the Retail Price Index, the RPI and the Consumer Price Index, the CPI? Well, if you really want to understand this and ‘what things typically cost in the UK’, it’s podcast number 451.
I think it’s good for everyone to learn a bit of Economics! And podcast 451 also goes into how for example, how the UK government likes to use the CPI as evidence for ‘the cost of living’, whereas actually the RPI is more realistic. But right now, the problem is that what things cost in the UK is rising fast. Therefore the word ‘crisis’. That word means a situation that’s an emergency, it’s desperate, it’s a very serious situation. So on the news at the moment in the UK, the ‘Cost of Living Crisis’ is being discussed - a lot. So what’s going on here?
Well, anyone who’s ever studied Economics will know about ‘inflation’ - that’s INFLATION. And inflation here means ‘currency inflation’. Basically if you’ve got inflation, it costs more of your currency, more of your money this year to buy the same thing than it cost last year to buy it. So prices are rising. You might see inflation when you come to buy something - that would be retail price inflation. The ‘retail industry’, that’s RETAIL just means ordinary shops, that anyone can buy from - whether that’s online or on the high street.
You might also see ‘wage inflation’ - that means that people’s pay, people’s salary from their jobs is rising. And the problem at the moment is that we have ‘retail price inflation’, but we don’t have ‘wage inflation’. So things year-on-year - that means if you compare each year with the next - year-on-year things are costing more. And people on average aren’t earning any more money.
There are some sectors of the job market where people are being paid more - for example if you’re a lorry driver or an HGV driver, then the chances are that you’ve improved your earnings in the last year, because of the shortage of workers in that industry. But most people are earning the same amount of money, while prices rise. This means that gradually we’re all becoming worse off. Not a nice feeling.
Inflation can be a very serious problem. It’s sometimes a sign of a country in what I would describe as ‘a real crisis’, in real economic distress, an economic meltdown if you like - where prices perhaps are rising so fast, that people can’t even afford to buy food and are in danger of starvation. That’s a proper crisis. We’re not at that level in the UK. But the worry is that inflation has risen to its highest rate in thirty years - currently sitting at 5.4% in the 12 months up to December 2021. These figures were out this week from the Bank of England.
So why is this happening? Well, the most pressing problem is the price of fuel in the world - that’s FUEL. The price of petrol, of gas - all of it is rising. This is a problem for domestic fuel use - your electricity, your gas, how you heat your home - that’s all going to cost more. The current estimate is that each household in the UK will on average pay an extra £700 a year for gas and electricity.
This also has implications in the manufacturing sector - so the word ‘manufacturing’ means ‘industry where you make products, you make goods - often in factories’. In the manufacturing sector, if energy prices are higher, it costs more to make the goods, and therefore the price of those goods when you come to sell them also must be higher. I’m sure you’re familiar with all of this in your own country, in your own language - but it’s great practice to hear me explain it to you in English, so that you can learn the right words, so you know the right vocabulary.
If we take the cost of petrol in the UK. Here the value of fuel dropped dramatically during the pandemic - that’s not the price for the end consumer, the customer putting petrol in their car - but the value of fuel, dropped during the pandemic. This happened because there was less demand - less consumption of petrol overall. No one was travelling anywhere very much.
So the petrol industry suppliers now want to recoup those profits. The retailers - the petrol stations in this case, continue to charge the higher prices. They want to recoup their losses too. Add into that - the cost of fuel in the UK is already high. Some statistics - we pay 40% fuel duty - that means tax to the UK government is 40% of the cost of our petrol. On top of this, another tax - VAT or Value Added Tax is also charged by the government on petrol - so that’s another 17%. We’re up to 57% tax on petrol.
A photograph of a couple scared of the increase in their gas bill. In this podcast, we focus on using common English words clearly and precisely as we reveal why the UK is expensive to live in.
That means every £1 that we spend on petrol, 57p is going straight to the UK government. Petrol stations or ‘the retailer’ here - well, typically they take 9% of the cost for their profit. And there’s around a 6% cost of biofuel additives - so chemicals which the law now says must be added to the petrol to make it less polluting, less damaging to the environment. The wholesale cost of the petrol in the UK, is typically only 27% of the price the customer actually pays! And 57% tax. Shocking!
Another effect is Brexit in the UK. There are fewer workers available, so we’ve gone from a situation where there were lots of people available to do jobs, to instead having a ‘skills shortage’. That means lots of job vacancies, but not enough people with the right skills to fill them. You might think this would make for ‘wage inflation’, but it doesn’t always.
Because there aren’t enough people immediately with the skills that are needed, this again just makes products and services that those business provide less available, fewer of them, more expensive. And the skills shortage just means that things take longer too. And if you’ve got to wait longer for something, because there are fewer workers available to produce it - sooner or later a business is going to offer it at a higher price, if it’s available more quickly. And where the greater number of jobs and fewer people to fill them is being solved by paying higher wages - where you have got ‘wage inflation’ - well that often just means that businesses put up the prices of their goods and services to cover the rise in the cost of labour. ‘The cost of labour’ means how much it costs to pay someone to do a job for you.
Of course, we can’t get far into this subject, without talking a bit more about the pandemic. If you take restaurants and bars - they’ve had a pretty awful time throughout the pandemic and many businesses have closed. Those that did survive the lockdowns are all open now in the UK - but there just aren’t as many people going out just yet. So it means that if you have a restaurant, you have to put up your prices in order to stay in business, because you have fewer customers (and you’ve probably got a history of making a loss during the pandemic). And many of your outgoings, many of those costs are rising. So restaurant meals cost more, so fewer people go out and on it goes.
Something like rail fares in the UK - that means ‘the cost of tickets to travel on the railway’. Since June last year, I’ve been travelling into London again on virtually empty trains. Clearly the rail companies haven’t been making enough money. So they’ve already reduced the services - and then in March this year, they’re going to put up the price of tickets by 3.8%.
The UK government is also raising taxes. They’ve been very careful not to raise the main income tax on what you earn, on your salary or your wage.. They’ve left that alone for now. But what they are going ahead with is a rise on the other charge on your salary - that’s called ‘National Insurance’ here in the UK. This is also a tax - they just don’t call it that! So for self-employed people like me - and for employers, National Insurance will rise by 1.25% in April. Why? Well, because we’ve just had a pandemic and there were a lot of grants given out to businesses, and the cost of all those vaccinations and free Lateral Flow Test kits - well it all needs to be recouped.
Oh, and if all of that wasn’t enough, the Bank of English have just put up the interest rate to try to slow inflation. So if you have a bank loan, money you’ve borrowed - or a mortgage, which is money you’ve borrowed to buy your house - well all of that is going to be more expensive to repay too.
So here we are - in a ‘cost of living crisis’. What a joy! Brexit, the Pandemic, now a squeeze on our cost of living. Still, at least we’re all here. And at least we can go out - and it looks as though travel is going to be much less restricted this year. So I’m staying optimistic and distracting myself with those thoughts.
Don’t forget to repeat listen to practice and if you need to work on basic English - Buy the 500 Most Common Words Course
I hope that is a useful practice for you of some of the vocabulary associated with the economy and Economics. This podcast should help you write those essays on business and economics in your IELTS test. It’s the same words, whether we’re about the UK or any other country.
And if you’re struggling with words and you find podcasts very hard, perhaps because you have difficulties with ordinary words in English, not just with the more difficult ones I’m bringing in - then don’t forget, you could benefit from our course which concentrates on just the 500 Most Common Words in English - and which makes sure that you know these ones really well.
Have a look at that course on our website at adeptenglish.com. Anyway, practise listening to this as many times as you need to, so that you understand all the words.
Enough for now. Have a lovely day. Speak to you again soon. Goodbye.
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