Household incomes under pressure
The financial press has given much space to the potential problem for UK household income in the short to medium term as wage pressure continues and inflation remains uncomfortably high. Despite the fact that many inflationary measurements use the consumer price index, which is currently around 3.1%, a number of observers believe that the retail price index, currently approaching 4.8%, is perhaps a more realistic assessment of the situation for UK consumers. So what does this mean for UK household incomes?
In simple terms, if your income is not increasing by at least the rate of inflation, whichever way you wish to measure it, then in reality your spending power is being reduced in real terms. When you also take into account many households in the UK are seeing a reduction in their headlining income then the situation is actually worse than it seems. A survey by Markit and YouGov has also cast further doubts on the strength of household incomes with 30% of those surveyed reporting a fall in income in August and just under 50% expecting the situation to get worse before it gets better.
As we have mentioned on numerous occasions, there is the potential for consumers in the UK to literally "talk themselves into" a recession.
Share this..
Related stories
One million customers overcharged for energy
27/11/2014 Over one million customers who have a pre-paid meter have been overcharged by their energy companies because their meter is faulty, Energy UK has revealed. The industry body has revealed that roughly 1.5 million energy meters have not been working properly since they were installed. This has been going on for seven years for some customers who had their meter installed in 2007....
Read MoreAre Green issues just for the boom times?
You may have noticed that over the last few months we have seen less and less green issues hitting the headlines, no news on new green taxes and a distinct lack of interest from the public. This now begs the question as to whether green issues are just a back handed tax for the boom times or has the consumer simply fallen out of love with the environment.
When you consider the situ...
Looking after the pennies could save thousands
While most people are always on the lookout for a bargain, as many as 16 million Brits are wasting their money by paying over the odds for everyday items.According to Alliance & Leicester Savings, 62 per cent of people do not shop around for their groceries, compared to just three per cent who said that they would not look out for the best deal for a holiday or electrical item.Research found that...
Read MoreScottish bankruptcies and insolvencies on the increase
It has been revealed that the trend in bankruptcies and insolvencies in Scotland is far more aggressive than that seen south of the border, which is concerning the Scottish Executive. While there is no one factor which is apparently causing such a rise in insolvencies and bankruptcies in Scotland there are concerns that the economy will recover significantly slower than the rest of the UK as and w...
Read MoreLow-income families hit by increase in cost of living
A report by the Joseph Rowntree Foundation has suggested that low income families in the UK are struggling to maintain a minimum standard of living as the cost of living continues to rise. The Foundation forecast that a single person needs to earn £14,400 to maintain a minimum standard of living while a couple with two children need to earn nearly £27,000 a year. This equates to around £7.38 an...
Read More