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We've Never Had It So Bad: Families' Financial Squeeze Is Worst In 90 Years

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http://www.dailymail.co.uk/news/article-1375377/Weve-bad-Families-financial-squeeze-worst-1921.html

Soaring inflation and weak earnings growth has led to the biggest squeeze on household finances since 1921, research has revealed.

British families are on average £910 worse off than they were two years ago, the Centre for Economics and Business Research found.

The squeeze - which is considered the worst in peacetime for 90 years - is set to continue with a two per cent fall in household disposable income this year.

A 2% fall doesn't sound so bad, although I suspect that figure will be wide of the mark for many.

Still at least in a consumer driven economy disposable income isn't important.

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"I don't have to tell you things are bad. The dollar buys a nickel's worth"

At what point will the people jump up and scream from the windows "I'm as mad as hell and I'm not going to take this anymore!"

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Where does the 2% come from, petrol up 30%, elec 10%, rails fares 8%, food 10%, VAT an extra 2.5% ... unless there are large pay rises. I suspect that discretionary spend for many is now negative - can't even cover the bills ... and tax credits gone as well.

At least mortgage payments are nice and low.

Yes I wonder where they come up with those figures .

On more than a few occasions over the years when we were being told that inflation was 2% or 2.2 % the Evening Standard has run articals Giving an in depth report on inflation and the figures they have come up with time and time again have been 5 and 6% . This year it must be more like 10-15% and with pay rises almost non existant the pain is now coming.

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Where does the 2% come from, petrol up 30%, elec 10%, rails fares 8%, food 10%, VAT an extra 2.5% ... unless there are large pay rises. I suspect that discretionary spend for many is now negative - can't even cover the bills ... and tax credits gone as well.

At least mortgage payments are nice and low.

My tracker went down from about £700 to £450 over the last 3 years of base rate drops.

I think now my disposable income is about the same, or possibly slightly less than it was when rates were 6%+ and i was paying £700.

Petrol tax up, road tax up, council tax up, national insurance tax up, VAT up, cost of fuel up, food up.... taxes and onflation have easily eaten the interest rate gains.

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taxes and onflation have easily eaten the interest rate gains.

"Onflation"! Now there's a worthy candidate for a new coinage, to denote the BoE's persistent lax attitude towards over-target inflation going on and on and on....

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Looks like someone pulled open their curtains and noticed the bars. Funny I selfishly did not want children because I like my free time with the wife. Now it turns out I saved them from a life of servitude. Funny to see comments like, 'We don't have chimney sweeps'. No we have families with 150k worth gold owed to the Lord of the land and enough turnips to survive for 1 month, much much worst.

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The real pain will begin when the REAL HPC begins.

So far we have seen about 20% off peak and that, IMO, is just the beginning. I am turning slighly more bearish than before on house prices after my offer at well over 30% down from peak was accepted.

Once the banks are reigned in the credit will grind to a halt and we will be back to where we were a couple of years ago--paying the piper.

The lunch is not free--we have dragged the dessert out long enough and its time to take the last sip of coffee and pay the bill.

I am feeling a tad bit gloomy again today. :D And I may no longer have a VI in such feelings.

Edited by Realistbear

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"I don't have to tell you things are bad. The dollar buys a nickel's worth"

At what point will the people jump up and scream from the windows "I'm as mad as hell and I'm not going to take this anymore!"

They are, that is why precious metals are rising. There is no use in wailing, politicians do not represent and are not answerable to the population and so there is no point in using those channels. The only course of action that remains to those not speculatively inclined is to leave the game with your winnings - if you are fortunate enough to still have any!

Edited by Peppa Pig

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I could not BELIEVE what my dad said last night when he pointed this out to me last night on teletext. After ALL my ramblings, as well... he is going to vote SNP... but what he said was 'We were better off under Labour' as if to say we should let them back in and start spending again!!

I really despair.

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From the report:

Douglas McWilliams, one of the report’s authors and Chief Executive of Cebr, added:

‘We have been pointing out the pressures on household incomes for over a year, during

which the underlying position has deteriorated as average earnings growth has remained

very low while commodity price inflation has accelerated. Most other forecasters have

been gradually adjusting their forecasts into line with us.

‘The OBR now forecasts that squeezed incomes will be offset by a record increase in

indebtedness: it is surprising that after a debt fuelled consumer boom and housing bubble

that they think either that borrowers will be prepared to borrow that amount or that

lenders will be in a position to lend that amount, let alone both.’

What that I hear? It's the sound of thousands of pennies dropping across the land :lol:

Also, I have quite a problem with that figure of 2% - seems far too low. Firstly, it uses the mean as opposed to median when measuring household income (and so is skewed by a hanful of top earners with high DIs). Secondly, not sure what they consider disposable income ie is it everything after housing costs or does it include bills, transport, food costs etc?

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I could not BELIEVE what my dad said last night when he pointed this out to me last night on teletext. After ALL my ramblings, as well... he is going to vote SNP... but what he said was 'We were better off under Labour' as if to say we should let them back in and start spending again!!

I really despair.

Labours plan has worked well, I suspect most of the country will feel the same. It what happens when the majority of people are economic illiterate.

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The 2% fall in income will be very meaningful when you consider that many costs that eat into your net income are rising at rates far higher than inflation.

The residual lump left after all those other costs have come out is getting smaller and smaller as almost all costs are now rising ( the only comfort for many was the fall in interest rates on their mortgage).

So a 2% fall in come could be very significant indeed when expressed as a % of discretionary expenditure

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Labours plan has worked well, I suspect most of the country will feel the same. It what happens when the majority of people are economic illiterate.

They've been helped by the Torys' message too ( or lack of one). It may well be that Dave n George have a master plan to get the economy earning real money again and starting to create jobs. But where's the evidence or publicising of this? People are just going to feel "Same old Tories, always happy to create mass unemployment'. I can't blame them if they're in that predicament.

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  • 276 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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