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Worst Household Squeeze Since 1955

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Worst household squeeze since 1955

Family incomes are suffering their biggest squeeze since 1955, resulting from rising unemployment coupled with widespread pay freezes and even cuts.

The fall has brought dramatic belt-tightening and a slump in the amount consumers are spending in the high street, on cars and on holidays.

City analysts yesterday described the figures as 'staggering' and 'awful'.

The pain for consumers is a direct result of a collapse in the UK's economic performance which has brought the deepest recession since the war.

Household incomes, comprising pay, bonuses and benefits, fell by £2bn in the first three months of this year to stand at £191bn.

The fall of 1.1% compared with the final three months of last year was the biggest since 1955, according to figures published by the Office of National Statistics (ONS). Household spending at the start of this year fell 1.2% compared with the previous quarter, the biggest percentage fall since 1980.

The figures paint a portrait of a nation gripped by fear of unemployment, which has meant people are simply too scared to spend. This has been illustrated by a fall of 55% year on year in the number of cars manufactured in the UK.

Foreign package holiday sales are down by around 16%, while a raft of household name retailers, including Woolworths and MFI, have been lost.

The ONS confirmed that UK economic output fell by 1.9% in the first three months of 2009. The annual rate of decline is 4.1%, which is the largest since 1980.

The figures make clear that it is only Government spending that is ensuring the slump was not more serious. Manufacturing output was down 5.5% in the first three months compared to the end of 2008, the service sector fell 1.2% and construction by 2.4%.

Most companies have been running down stocks held in their warehouses. These inventories have fallen at their fastest rate since 1948. In fact stock levels are now so low that firms will now have to start placing orders, which will help manufacturers.

Economist Brian Hilliard, of Societe Generale, said: 'I think these are staggering numbers. This is savage'.

Ross Walker, of Royal Bank of Scotland, described the numbers as 'awful', though he said they were largely in line with City expecatations.

Stephen Lewis, of Monument Securities, said the fall in consumer spending was slightly greater than expected. However, he said UK exports have held up better than those of other nations, largely because the fall in sterling has made our goods cheaper overseas.

The gloomy figures are at odds with some other recent studies pointing to some revival in the housing market and on the High Street.

Why does it takes headlines like this to (hopefully) shock the nation into action?

It is going to get worse, much worse.

_____________________________________________________________________

In 1955...

Rosa Parks refused to give up her seat on the bus,

Eisenhower had a heart attack,

Great Britain declares State of Emergency due to National Rail Strike,

Clement Attlee who oversaw the creation of the British Welfare System resigns as leader of the Labour Party,

James Dean died in a car accident,

Albert Einstein passed away,

The Soviet Union and its Eastern Bloc allies sign the Warsaw Pact giving integration of military, economic and cultural policy between the eight Communist nations,

Ruth Ellis the last woman in England to be executed is hung at Holloway Prison,

Ray Kroc starts the McDonald's fast food restaurant chain,

First Guinness Book of World Records Published.

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.... and even though household incomes are "feeling the pinch" (to quote the BBC - in their "don`t scare the sheeple" manner), house prices are going up, or about to - if you believe Snivley/Rhino/McTarnish/Valharious etc.

Oh, I`ve just worked it out. People have less to spend, not because of rising unemployment/inflation/wage cuts, but it`s because they are outbidding each other on rising property prices ! I should have realised that.

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Rosa Parks refused to give up her seat on the bus.

This is coming here, soon. Something like it, at any rate. A pensioner refusing to pay council tax, some smoking busybody being told to get to ******, something is due.

Tipping point.

Overdue.

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Rosa Parks refused to give up her seat on the bus.

This is coming here, soon. Something like it, at any rate. A pensioner refusing to pay council tax, some smoking busybody being told to get to ******, something is due.

Tipping point.

Overdue.

A restless feeling? So much of what we feel agrieved about we are unable to articulate for fear of being labelled ... something...ist. It's like a festering sore, the pus is building and it's reasy to burst. Will it all go with a big bang or just fester on? Explode all at once or just be a series of minor disturbances?

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Gordon delivers !:

"Household incomes, comprising pay, bonuses and benefits, fell by £2bn in the first three months of this year to stand at £191bn.

The fall of 1.1% compared with the final three months of last year was the biggest since 1955, according to figures published by the Office of National Statistics (ONS). Household spending at the start of this year fell 1.2% compared with the previous quarter, the biggest percentage fall since 1980."

/see: Worst Household Squeeze since 1955

http://www.thisismoney.co.uk/news/article....e_id=2&ct=5

1.1% is not so much if debt costs on mortgages many times annual income have fallen by a similar amount or more. Sounds inflationary! :P

I wonder what happens if you plug in an average familes total outgoings and income and compare?

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1.1% is not so much if debt costs on mortgages many times annual income have fallen by a similar amount or more. Sounds inflationary! :P

I wonder what happens if you plug in an average familes total outgoings and income and compare?

Since the proportion of their incomes that people are managing to save has risen from around 1% to 4% over the last year, it seems quite possible that net income, taking into account all outgoings such as mortgage payments, has actually risen. Whether that's inflationary or not is anyone's guess.

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Since the proportion of their incomes that people are managing to save has risen from around 1% to 4% over the last year, it seems quite possible that net income, taking into account all outgoings such as mortgage payments, has actually risen. Whether that's inflationary or not is anyone's guess.

It just shows the interest rate / tracker bung has failed to work. Not only are those receiving the bung not spending it the ordure has been spread to the savers, who are not going to spend their way out of recession in fright as it goes completely against the grain to do so. In hindsight this will be seen as a severe policy error, one that has exacerbated falling demand not improved it and spread fear and distraction to a larger percentage of the economy.

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Yes but it will all be OK when the Tories or BNP get in , my property price will go back up according McTavish logic and the lenders will miraculously start lending at 2007 prices and we will all dance with the elephant in the room YIPPEE......

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Rosa Parks refused to give up her seat on the bus.

This is coming here, soon. Something like it, at any rate. A pensioner refusing to pay council tax, some smoking busybody being told to get to ******, something is due.

Tipping point.

Overdue.

So you've been saying, for a while.

Care to elaborate slightly, I don't really want to be here in a years time still hearing that the collapse is coming, overdue blah blah blah.

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Rosa Parks refused to give up her seat on the bus.

This is coming here, soon. Something like it, at any rate. A pensioner refusing to pay council tax, some smoking busybody being told to get to ******, something is due.

Tipping point.

Overdue.

Is the mp expenses row not going to prove to be the tipping point?

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So you've been saying, for a while.

Care to elaborate slightly, I don't really want to be here in a years time still hearing that the collapse is coming, overdue blah blah blah.

you won't have to wait anything like that long.

HMG funded 65% of its spending by seigniorage in the first quarter of this year - and in April gov't spending was 4 times greater than tax receipts :ph34r:

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Guest มร หล&#3
Where are the trolls when you need one?

What, what ??? Will I do?

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Worst household squeeze since 1955

Why does it takes headlines like this to (hopefully) shock the nation into action?

It is going to get worse, much worse.

_____________________________________________________________________

In 1955...

Rosa Parks refused to give up her seat on the bus,

Eisenhower had a heart attack,

Great Britain declares State of Emergency due to National Rail Strike,

Clement Attlee who oversaw the creation of the British Welfare System resigns as leader of the Labour Party,

James Dean died in a car accident,

Albert Einstein passed away,

The Soviet Union and its Eastern Bloc allies sign the Warsaw Pact giving integration of military, economic and cultural policy between the eight Communist nations,

Ruth Ellis the last woman in England to be executed is hung at Holloway Prison,

Ray Kroc starts the McDonald's fast food restaurant chain,

First Guinness Book of World Records Published.

And Sibley was but a twinkle in the eye of his parents.

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Rosa Parks refused to give up her seat on the bus.

This is coming here, soon. Something like it, at any rate. A pensioner refusing to pay council tax, some smoking busybody being told to get to ******, something is due.

Tipping point.

Overdue.

I don't know why, but I love Rosa Parks.

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