Struggling to come to terms with inflation

For most UK demographics, the current hike in the cost of living is a first.

The last time that the monthly "run rate" for inflation exceeded 5% was 1991/92 - 30 years ago.

As a result, we have a large proportion of the workforce, as much as two-thirds, who have never had to deal with prices rising as rapidly as today (January 5.4% run rate).

Predictions from The Bank of England that the situation will stabilise by the end of the year go unheard.

In the business of dentistry, we have to be mindful of two ways in which this will affect us:

1. Consumer confidence and

2. Team expectations.

On the first, my suggestion is that some of the "boom" in consumer spending on dentistry may subside, as patients tighten their belts and/or divert spending back into savings or summer fun.

I'm asking my clients to re-energise their internal marketing systems as a result.

On the second, we have a new phenomenon - staff members asking for instant pay rises to cope with their equally instant price rises at the checkout.

Even last week, one client reported a tap on her door, followed by the question "when are you going to increase our wages to cover these price rises for energy?"

The current media coverage of geopolitics and war is likely to exacerbate these fears.

"When I was a lad" - we lived in a high inflation economy.

Even so, we were educated that pay rises took place once a year and were based on merit, performance and increased capability.

My most enlightened employer, Hambro Life Assurance (1980-1986), adjusted everybody's wages automatically on 1st January, in line with the average earnings index for the previous calendar year - then - and only then - each employee's performance and behaviour was assessed and appropriate increases granted, or not.

Average earnings UK for 2021 were up 4%.

Wage reviews are not and never can be a "real time" adjustment, even though what we pay for energy, or at the till and the pump may well be.

That's life - and it seems that 66% of the workforce are going to need to learn the hard way.