I haven't kept up with the state of things in Britain (I left some years ago), but were I am now (Portugal) it was just recently on the news that credit card debt is the highest it has ever been.

This kind of thing is a signal that people's finances are tight (read: they have no savings, spending everything they earn), as many people use credit card debt (which, remember, tends to have 20%+ APR interest) for dealing with unexpected large expenses (for example, their fridge stopped working) that they can't pay for directly from their savings.

From what I remember from the UK, even before Brexit things were getting worse for most people with average real incomes for the lower 90% of the population in economic terms falling at about 1% per year.

From what I've been reading it's the same or even worse in the US.

So, how likely is that the various effects of higher oil prices (not just on food prices but on the prices of pretty much every physical product due to transportation costs as well on the prices of fuel for people who still have ICE cars) will, when a large percentage if not even the majority of people are in a financially tight situation with no significant savings, cascade into all manner of problems, from mortgage defaults to companies going bankrupt (with people losing their jobs) because their revenues went down due to lower sales and their costs went up due to higher fuel prices?

Further, specifically for Britain, never forget that the response of the Government to the 2007 Crash was to support bankers and more broadly asset owners and make most people pay for it via Austerity (something which in turn fed the discontent that gave Leave a victory in the Referendum and thus Brexit).

Absolutelly, people will basically do like you and squeeze little savings here and there, yet when lots of people do that companies' revenues fall and some will be bankrupt, plus some things (like mortgages and rents) aren't really flexible (wellm not easilly: sometimes you can downsize but even that has costs) and with the current housing market a lot of people are spending most of their after tax incomes on housing.

Just food price increases will mainly hit poorer people in poorer countries more.

Then again the median wealth in the US is less than Portugal - it's a "rich" country only because a handful of people are stupidly rich, not because most people are - so most Americans are poorer than Brits (which has a median income above Portugal).

You do make a good point though.

As I see it, there are two factors here:

• How much will food prices go up: on one side there are a few ways oil price push prices up, mainly increases in fertilizer costs (as most fertilizer is made from oil), farming machinery operation and transportation, whilst on the other side there is some flexibility on the Demand-side (people actually eat more than they need and can eat less) so its not like this is an inflexible market were a small inbalance between Production and Demand can massivelly move prices.
• How tight are most people's finances already. Specifically, how likely it is that there's a "drop that spilled the glass" effect from higher food prices that mean it cascades into all manner of other things (such as mortgage defaults) because that pushed people over the edge.

Personally I'm more concerned over the latter mainly because wage growth in most of the West hasn't kept up with inflation, inequality has exploded and most people have been so bad in terms of balance between incomings and outgoings that not only do they have little or no savings but aggregated credit card debt has never been this high.

Seems to me that the way this will explode is likely to be more akin to dominos falling due to various effects from oil prices increase cascading into an ever greater effect because we're in an Economy where financially most people are already very tight, than due to any one overwhelming effect.