http://www.express.co.uk/news/uk/394547/Mr-and-Mrs-Average-live-on-16-034
http://blogs.telegraph.co.uk/finance/ianmcowie/100023337/budget-2013-fears-rise-as-cost-of-living-soars-four-times-faster-than-earnings/
I've red these articles above and made me a bit puzzled as the figures are absolutely not correlating. Reading two sources maybe not enough to get correct info that's okay, but which one could be the more realistic?
All incomes in the UK have been falling since 2007. Those in the public sector less than in private industry. Wages in the public sector have been increasing a 1.5 to 2% a year since 2010 and the private sector has been at best static or with slight falls. Spending power has gone down for four reasons, tax increases, a policy of making £ exchange rate fall and it has dropped about 25% from its peak, mass immigration suppressing private sector pay increases and high inflation. All of these are directly or indirectly under our Government's control.
Inflation has been as high as 5.3% post 2007, so real spending power is between 8 and 13% lower now than in 2007. Low interest rates and high inflation means that it is better to spend than save, so savings rates have dropped which has meant consumer spending has stayed higher than it would have done otherwise. Many people have high debts that they are deleveraging as fast as possible, so overall personal and property debt is going down.
The main areas of inflation are property rent, food, water, transport and energy. These are the basic necessities of life that we need to live, so the people that spend the greatest proportion of their income on these (which is the poorest in society and those like pensioners on fixed incomes) have been hit the hardest.
Food handouts from food banks to stop people starving is at an all time high. The groups needing to use these are reckless spenders (a small percentage), those that are ill or unemployed and have not received benefits (delays are becoming more common) and the self employed due to delayed payments or more likely bad debts.
UK GDP is still below 2007 levels, but is at last beginning to grow, which will hopefully continue, so peoples standards of living will hopefully start to improve at long last after 6 years and counting of falls.
London is becoming more and more an international city like New York with many rich people from abroad buying property. While the rest of the country have suffered a fall in property prices, London experiences about 6% property inflation every year regardless on how the economy is doing.
Net migration into the UK is about 100,000 per year, which means that when taken into account the economy should be growing by 0.15% every year, just from having more people here. The fact that there has been virtually no growth over the last 6 years, until the last 6 months of 0.9% shows how bad our economy has been.
The UK with a 120bn year deficit and ever increasing sovereign debt, poor balance of payments (we don't earn our way in the world) and a high energy price policy means the UK is far from out of the woods, but we are much better off than France, the Netherlands and the PIIGS.
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Topic: Income and costs in the UK (Read 835 times)