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Why Our Purchasing Power Is Set To Suffer The Biggest Squeeze Since 1870

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http://blogs.telegraph.co.uk/finance/ianmcowie/100010094/why-our-purchasing-power-is-set-to-suffer-the-biggest-squeeze-since-1870/

Low or no wage increases coupled with rising taxation and inflation mean most people’s purchasing power is set to suffer the biggest squeeze since the 1870s, a leading economist claims.

Roger Bootle’s bleak analysis follows similar views expressed earlier this year by Mervyn King, Governor of the Bank of England, but Mr Bootle – economic adviser to accountants Deloitte – goes even further.

Whereas Mr King said the redution in purchasing power was the worst since the 1920s, Mr Bootle reckons Britons have not suffered anything like it for nearly 150 years. He predicts that for the next year many members of the ‘squeezed middle’ and others will feel like ‘new Victorians’ as meagre increases in wages are insufficient to keep pace with rising taxes and prices.

On a brighter note, real incomes should be rising again by the end of 2012. But there is more belt-tightening to come before we get there, Mr Bootle explained: “A number of factors will maintain the downward pressure on household incomes in the near-term. For a start, pay growth is unlikely to catch up with inflation any time soon. Inflation is heading towards – and possibly above – 5pc.

When I saw this headline I was worried, luckily it's only going to be for 21 months at the end of which it will all be back to normal and our exponential growth path will be resumed...

More at the link.

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This was discussed on R5 on my way into work.

Nice piece for those ramping Mervs continued 'vigilance'.

They stated at the outset that prices are rising faster than wages.

Conclusion: The BoE is correct to ignore its remit on inflation! (Companies need to pay more apparently!)

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Surely the squeeze will get worse as developed economis get poorer and developing ones get richer until they are on the same level.

The spin from these people is endless.

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http://blogs.telegra...eze-since-1870/

When I saw this headline I was worried, luckily it's only going to be for 21 months at the end of which it will all be back to normal and our exponential growth path will be resumed...

More at the link.

inflation is a funny thing..At the mo, costs go up 8% say..your wages stay as they are.

this time next year, everything is 8% more expensive, but, inflation is 0%.

the squeeze is over according to the stats.

however, the noose is still 8% tighter than it was last year.

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There is no real squeeze. Abundant energy made for almost four decades of amazing growth, and now as the UK's energy supply is on the wain in a massive way, the growth will turn negative and never recover. Sad, but true.

People just have to learn how to stop spending first their own money, then somebody else's on non essential crap.

I say good, leaves more for me.

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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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