The annual Sunday Times Rich List was published on 26th April, with steelmaker Lakshmi Mittal topping the list with a £10.8 billion fortune. Chelsea football club owner Roman Abramovich was second, with the Duke of Westminster in third place. The fortunes for those in the list, though, have taken a big drop in a recession hit economy.
The total fortune for the 1000 listed has fallen by over a third. In 2008 the total fortune was a record high £413 billion. However a 37% fall has seen this amount drop by £155 billion to £259 billion. Mittal is top of the list despite loosing more than anyone else. The last year has seen his fortune drop from £27.7 billion, a fall of 61% and £17 billion. Abramovich's fortune has decreased by 40%, from £11.7 billion to £7 billion.
So why does it matter if the rich have lost some of their vast fortunes? Business tycoons making less money, means they will take decision that could affect many industries around the country. They may well cut down on their business interests, especially those not making the profits they are looking for. This will have the knock on effect of more people loosing their jobs.
In a recession even the super rich are likely to be more careful with their money, and this will affect many industries. The wealthy are often known for their love of extravagant cars. This is less likely to be a priority in the current financial climate. The motor industry is one the areas that has been most affected in the recession, both at the top and bottom ends. People are more likely to wait until times are better before they purchase a car.
High end products are likely to suffer. If there is a cheaper option available, it is more likely to be taken up when times are tough. Somebody who needs a new suit, is less likely to go to a Savile Row Tailors to have a suit made for them, and more likely to pay the sales a visit.
With the super rich loosing money, expensive luxury products and services are less likely to be sought after. There will be less demand for Luxury Yachts, for example. Yachting is an area the wealthy like to indulge in, but they are less likely to see this as an essential activity in the current situation.
The average person may not think that the rich are the people who will suffer most in a recession, and they are probably right. If they spend less though, and cut down on their business interest, that doesn't just affect them, but many others who work in all sorts of industries.
Andrew Marshall ©
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