Interesting stuff.... I didn't realize that inflation was currently
so high in the UK....
Barry
http://www.bbc.co.uk/news/business-13948326
28 June 2011 Last updated at 12:45 ET
Household income sees biggest fall since 1977
The squeeze on spending will add to caution about the need for an
interest rate rise
UK households have seen the biggest fall in disposable income for more
than 30 years, official figures have shown.
The Office for National Statistics said that in the year to the end of
March real incomes - adjusted for inflation - fell 2.7%, a fall not
seen since 1977.
Higher taxes, domestic bills and inflation are all eating away at
consumers' spending power.
Bank of England governor Sir Mervyn King told MPs there was a
"substantial squeeze on real living standards".
According to the latest ONS data for the first three months of 2011
household spending fell 0.6%, its fastest quarterly decline since the
second quarter of 2009.
This took the annual fall in household income to 2.7%, a squeeze on
spending that was underlined on Tuesday by further gloom on the High
Street.
'Uncomfortable'
Chocolate chain Thorntons said it would close some stores and
Liverpool-based department store chain TJ Hughes said it was preparing
to appoint administrators.
Sir Mervyn told the Commons Treasury Committee that "inflation is
clearly uncomfortably high" and contributing to "a very substantial
squeeze on real living standards".
He added: "This is the way in which we, as a country, are adjusting to
the consequences of the financial crisis and the macroeconomic
rebalancing that is necessary to get through that process.
"And it's going to be an uncomfortable period. There's no doubt about
that," Sir Mervyn said.
The consumer prices measure of inflation is at a two-and-a-half year
high of 4.5%, and may go higher before falling slowly from next year.
But further evidence that consumer spending is under pressure will
bolster arguments from those economists and policymakers who believe
interest rates should be kept on hold.
The Bank of England has kept interest rates at a record low of 0.5%
since March 2009, despite inflation being above the Bank's 2% target
for most of that time.
Despite expectations earlier this year that interest rates would rise
by the summer to try to curb inflation, many experts now believe the
prospect of an increase has now disappeared into 2012._______________________________________________
Futurework mailing list
[email protected]
https://lists.uwaterloo.ca/mailman/listinfo/futurework
