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Standard Of Living To Fall For Two Years

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Don't think this has been posted:

Office for Budget Responsibility: standard of living to fall for two years

Households face falling standards of living for at least another two years as rising prices outstrip wage increases, the Government’s official economic forecaster has warned.

Inflation will exceed expected salary increases until the middle of 2013, more than five years after the onset of the recession, figures from the independent Office for Budget Responsibility (OBR) suggest.

The predicted squeeze is far worse than ministers had previously signalled. A typical middle-class family will see their disposable income fall by more than £1,500 this year as a result.

In one possible scenario, the OBR, set up by George Osborne to provide economic forecasts, suggests that high inflation could result in a twelvefold rise in Bank of England interest rates, up to six per cent, plunging many households into difficulty.

Office for Budget Responsibility: standard of living to fall for two years

Now according to this:

A Base Rate rise of just 0.5 per cent would mean a £44 per month jump in mortgage payments for homeowners with a £150,000 variable repayment mortgage on an average 4.74 per cent SVR. If the Base Rate rises by one per cent, their monthly repayments would leap up by £88, representing a huge hit to their finances.

So by my reckoning, the stagflation we are seeing is actually having the same result as a base rate rise of around 1.5%!

And the rate rises haven't even begun yet...ouch :D

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Don't think this has been posted:

Office for Budget Responsibility: standard of living to fall for two years

Now according to this:

So by my reckoning, the stagflation we are seeing is actually having the same result as a base rate rise of around 1.5%!

And the rate rises haven't even begun yet...ouch :D

2 years? I think that they deliberately missed a 0.

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In my opinion the standard of living has been dropping for the past 14 years. Homeowners have enjoyed an artificial standard of living but it counts for nothing unless you've cashed out.

Labour falsified inflation stats for 13 years, even though it was obvious that Britain was becoming more expensive. With currency erosion, high house prices and mass unemployment it's difficult to see how the standard of living will improve in 2 years. They are dreaming.

Things are a lot worse than the BoE or the government will tell us. They can hide the fan or move it around but eventually the crap will find it.

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I guess that's two years from now. It's 2011 and the economy has been a sick patient for a few years now.

We're still waiting for the recovery in mortgage / transaction volumes. Recovery is always just around the corner...

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Its been falling where ever your local factory or manufacturing base has been offshored.

The shortfall has made up by remortgaging off the back of rising house prices, tax credits, and juggling credit cards.

We're running out of room for maneuvering!

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I guess it's all right if you work in the financial sector though?

I wonder if the wage rises in the financial sector are causing the national average to look distorted and better than it actually is.

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I guess it's all right if you work in the financial sector though?

I wonder if the wage rises in the financial sector are causing the national average to look distorted and better than it actually is.

Which is why the mean is meaningless! Median income is a much better measure of average.

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(...) Homeowners have enjoyed an artificial standard of living but it counts for nothing unless you've cashed out. (...)

Exactly.

Well, actually the whole country's economy was being boosted by a lot of credit. Now we have the debt.

The bubble years were not "normal" years. That standard of living was not the normal level, sustainable by our productivity. Now we will go back down to "normal".

And with some debts to pay.

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Living standards have a direct relationships between the costs of the basics; shelter, food, warmth and water and peoples incomes.

As an example we bought our house for £130k.

Now the same house would cost you £220k.

We have almost paid off our mortgage and thus have lots of spare money every month despite neither of us being higher rate tax payers.

Someone buying the house off us would be paying £1400 a month of post tax income to service the debt. Therefore about £2k a month of extra income than us would be required to maintain the same standard of living we have now despite the actual shelter my house provides being no different.

Multiply that by every household in the country and you can see why banks are so profitable and the rest of the economy is struggling.

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Living standards have a direct relationships between the costs of the basics; shelter, food, warmth and water and peoples incomes.

As an example we bought our house for £130k.

Now the same house would cost you £220k.

We have almost paid off our mortgage and thus have lots of spare money every month despite neither of us being higher rate tax payers.

Someone buying the house off us would be paying £1400 a month of post tax income to service the debt. Therefore about £2k a month of extra income than us would be required to maintain the same standard of living we have now despite the actual shelter my house provides being no different.

Multiply that by every household in the country and you can see why banks are so profitable and the rest of the economy is struggling.

Great summary.

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Living standards have a direct relationships between the costs of the basics; shelter, food, warmth and water and peoples incomes.

Where are the journalists, newspapers, reports based upon quango research, highlighting the standard in the fall of living which has occured during the last ten to twelve years?

[A direct result of government sponsored fraud and theft, causing house prices to rise by nearly 300%?]

We have been press ganged into becoming the new proletariat, whilst they enjoy their bourgeoisie status, through their ill gotten gains.

Where is the research confirming it is within the government's power and scope to rectify this Malum In Se?

Or the research showing that they refuse to implement equality, because they want to unjustly segregate society, ensuring we remain as their debt slaves?

The British Government are supporting economic fascism.

Edited by Dan1

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Which is why the mean is meaningless! Median income is a much better measure of average.

Agreed - and there's around 6k difference between the two figures which shows how much the mean is distorted by a skewed income distribution.

Actually, I think given the mass transfer of full to part-time work (and to be fair the rise of dual income households and benefit distortions), net median household income would be the most relevant figure.

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2 years? I think that they deliberately missed a 0.

Considering the property boom hasn't corrected yet, when it does the UK standard of living will correct accordingly and it won't be for just 2 years.

Stagflation is going to be a real nightmare, for those with debts its going to be very tough.

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It isn't 2 or 20 years it's forever.

When 5.5% RPI is ignored even if inflation drops it only means prices aren't rising as quickly they will never drop. As more of the country is now in the hands of fewer corporations and we have so many immigrants prepared to work for less - wages will never recover to overcome the compound effect of the inflation.

Corporations and banks have got the lot.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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