Household incomes set to be squeezed
The Bank of England has this week warned UK households to expect a reduction in their standard of living in the short term. This comes amid signs that softness in the UK employment market, with concerns that unemployment has not yet peaked, could lead to pay cuts, pay freezes and below inflation rate pay increases in the short to medium term. When you also consider that the price of goods in the shops is rising faster than the average household income it is easy to see where the squeeze will come from.
How long the squeeze on household budgets will last depends purely and simply on the UK economy and the expected recovery in the short to medium term. However, if the economy was to turn downwards this would place yet more pressure on family budgets and we could see more people pushed towards the edge of financial oblivion. These are very difficult times for the UK economy and indeed households across the UK will continue to feel financial pain long after the UK economy has pulled well away from the recession.
It is becoming more and more evident that the Bank of England is placing a more negative spin on the UK economy and the prospects for family finances in the short to medium term. Quite why the bank has turned so negative so quickly will no doubt become evident in the weeks and months ahead but it is starting to concern many investors and families in the UK.
Share this..
Related stories
Is The UK Car Market Set To Suffer?
As talk of the credit crunch centres on the housing and property market there are signs that it is having an impact upon the car market. Over the last few years we have seen more and more UK car purchases financed by credit, a line which can often bring in useful commission for car retailers. However, as the credit crunch continues to strangle the money markets there are signs that car sales are...
Read MoreDavid Cameron outguns Gordon Brown over MPs expenses
In a startling revelation David Cameron has today shaken the whole UK political scene with confirmation that members of the Shadow Cabinet have agreed to repay a variety of expenses which have received significant criticism over the last few days. Literally thousands of pounds will be repaid relating to furniture expenses, gardening costs and home improvements amongst other things in a move which...
Read MoreBarclays bank pays former head £161,000 a month
Frits Seegers, the former head of Barclays retail and commercial banking operation, is in line to receive almost $250,000 a month from the company until at least the year-end 2010 even though he left the business in November 2009. He was one of the more high-profile victims of a management and structure shake up although under his contract he is entitled to the above monthly payment until at least...
Read MoreWould you take a pay cut to save your job?
The news that the 25,000 strong workforce of steelmaker Corus have offered to take a 10% pay cut has prompted the question, would you take a pay cut to save your job?
The move comes amid signs from the company that a number of factories were pencilled in for either a short-term shutdown or ultimate closure. This seems to have prompted a discussion between the unions and the company'...
British Gas raises Prices by 6pc
British Gas has announced that it will raise the prices of gas and electricity by 6pc in a move to cover rising costs, said to be largely outside of the companies’ control. The company, which is the largest supplier of gas and electricity in the UK, has put the rise in prices down to a range of factors according to managing director, Phil Bentley: “Britain’s North Sea gas supplies are run...
Read More