Sustained recovery to the economy took another blow after a real household income drops to the lowest for 30 years.
The office for National Statistics reported an overall fall of 0.8% in real household disposable income - this is the lowest since 1977. The announcement of the widest cuts to spending and employment has affected high -street spending. George Osborne said, at the Treasury Committee; "While this budget includes hard measures, we are convinced they are unavoidable in the short term to pave the way for a strong recovery.
However this decline has directly affected predicted growth to the economy for 2011 after the growth forecast was downgraded in last week's budget by George Osborne.
A report in the Guardian said; "Rising commodity prices and the VAT increase mean inflation is high and outpacing normal pay growth, putting a real squeeze on real earnings," said Redwood. VAT increased by 2.5 percentage points to 17.5% in January 2010, rising again, to 20%, at the start of this year.
Britain's will start to feel the pinch this year after the recent announcements of mass spending cuts and to employment - with those out of work set to soar, a gloomy predicted gloomy couple years lies ahead.
Chief UK European Economist at IHS Global insight said; "People are having their purchasing power squeezed by current inflation levels and muted wage growth, while concerns about the financial squeeze are kicking in and people are increasingly worried about their jobs. A lot of people can't afford to spend so much, while those that can are becoming more cautious. Given that consumer spending accounts for 65% of the economy, this is worrying,"
Source: www.thelondondailynews.com
The office for National Statistics reported an overall fall of 0.8% in real household disposable income - this is the lowest since 1977. The announcement of the widest cuts to spending and employment has affected high -street spending. George Osborne said, at the Treasury Committee; "While this budget includes hard measures, we are convinced they are unavoidable in the short term to pave the way for a strong recovery.
However this decline has directly affected predicted growth to the economy for 2011 after the growth forecast was downgraded in last week's budget by George Osborne.
A report in the Guardian said; "Rising commodity prices and the VAT increase mean inflation is high and outpacing normal pay growth, putting a real squeeze on real earnings," said Redwood. VAT increased by 2.5 percentage points to 17.5% in January 2010, rising again, to 20%, at the start of this year.
Britain's will start to feel the pinch this year after the recent announcements of mass spending cuts and to employment - with those out of work set to soar, a gloomy predicted gloomy couple years lies ahead.
Chief UK European Economist at IHS Global insight said; "People are having their purchasing power squeezed by current inflation levels and muted wage growth, while concerns about the financial squeeze are kicking in and people are increasingly worried about their jobs. A lot of people can't afford to spend so much, while those that can are becoming more cautious. Given that consumer spending accounts for 65% of the economy, this is worrying,"
Source: www.thelondondailynews.com
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