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Real Income Falls For First Time Since Early 1990S

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Incomes have fallen in real terms over a three year period for the first time since the 1990s, according to a new report from the Institute for Fiscal Studies.

The report, Living Standards during the Recession, says that between 2008 and 2011 income has fallen by around 1.6 per cent when in a typical three year period it would have risen by around 5 per cent, giving a net effect of a 6.6 per cent fall.

Consumer confidence is currently at an all time low with The Nationwide Consumer Confidence Index falling back ten points to 38 in February, which is driven by growing pessimism towards expectations on finances and spending.

Job security & unemployment continues to be a problem with the local claimant count rate at 6.6% in January, up from 6.5% in December with 300 more people claiming unemployment benefits (an increase of 3,500 over the year).

Ultimately these figures for me are further evidence of the doom and gloom and anticipated further financial hardship to come and with the expected interest rate rises this year the pressure may just mount too much and cause a shift in the current asking prices.

We continue to hear reports that sellers are being more realistic about the prices they can achieve for their home but for me personally I don’t think that this is the case with the current asking prices in NI. Instead of a Spring Bounce I think EA’s should engage in a ‘Spring Clean’ and get rid of the houses on the books that remain overpriced.

http://www.ifs.org.uk/publications/5517 (link to report - Living Standards During the Recession)


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There's no inflation problem, but there is a standard of living problem.

Cost of living continues to rise with CPI annual inflation currently at 4.4% up from 4.0% in January. Inflation appears to be rising.

Surely the 2 go hand in hand?

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