Wednesday, December 5, 2007

Cost of living is up, largely due to houses

Disposable income at lowest level in 10 years

Disposable income is at its lowest level for a decade, as taxes, housing costs, phone bills and travel expenses eat into salaries, researchers say. While the average household gross income has climbed over the past decade from £34,796 to £53,835, people have far less of that money to spend each month after they have paid essential bills.

Posted by drewster @ 11:33 AM (912 views)
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9 thoughts on “Cost of living is up, largely due to houses

  • japanese uncle says:

    This is precisely why HPC will inevitably bring in deflationary pressure. Remember oil price can plummet as well as soar. When HPC is accelerated while oil price that is not necessarily supported by the genuine (but speculative) demand, we will see a surge of deflation. Downsizing acorss the whole economy on a grand scale is a quite plausible scenario.

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  • It will of course get worse still…

    Remember that we all will have to pay for Northern Rock, Cross Rail, The Olympics, The Tube (Metronet). Or do I forget or am I confused? London as they are an economy on their own and don’t need the rest of the UK will be paying for this won’t they?

    Won’t they?

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  • if the average household income is £54K then the average house price today of £200K remains in affordable reach of the average household. Something not right here. I suspect that the average household income has risen due to thirty somethings still living at home with mommy and daddy.

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  • stillthinking says:

    I find the fact that we give over 65% of our earned pay to either government/banks/existing landowners a completely disgusting theft. On another note,
    34.8K to 53.9K in 10 years is the same as 4.5% annual wage inflation every year, as in every year, the average. As the RPI roughly matches this, it would seem that suspicions of discounted price inflation are overstated. The general public are simply paying relatively more to government and banks, and are confusing having less to spend with increased prices.

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  • daft boy,
    I don’t know where they get that £54k figure from either, whether it’s mean or median, or what they define as a “household”.
    I’ve dug up this nugget from National Statistics, in the graph it looks like average household gross income is around the £28k mark. http://www.statistics.gov.uk/cci/nugget.asp?id=334
    Yet another source gave the figure as £33,700. It looks like one of those where you take whichever figure best fits your argument.

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  • No surprises here all due to the most crap corrupt deceitful dishonest government in living memory.

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  • This is the result of fudged inflation figures. For years the government have been pretending that CPI is around 2.0% by brushing real inflation under the carpet. The problem is the build up of inflation under the carpet now appears as a big lump the size of a baby elephant and it is really difficult to ignore it. Shrinking disposable income is the result of pay increases that do not match “real” inflation.
    Continually announcing a CPI of around 2.0% is an embarrassment to the government and the MPC and treating the public with contempt.
    The whole method of measuring inflation needs a radical overhaul as does this awful government.

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  • stillthinking says:

    What real inflation? Higher taxes are not inflation, and a housing bubble isn’t real inflation either (as it eventually corrects). Also, having less money to spend isn’t inflation. The only inflation has been in the amount we are obliged to pay to the public sector, but this isn’t inflation because of course we get much better services which are better value for money(!).
    Less money to spend isn’t inflation, its called getting poorer. We are getting poorer. I don’t think this is because of some economics equation.
    The real tragedy is that the country would probably have been ok if Labour had only been in for two terms, written all over the Labour psyche is the redistribution of wealth from the unfair Tories, very much like a parent and child relationship ( you may laugh but I believe this). I think that Labour from the beginning believed that there was a balance of power in the UK and that their mandate was temporary, so they exaggerated their changes to temper the return to power of the tories. As we know know, the tories collapsed completely, and the third term essentially left the children in charge. They can’t clean this mess up and to be fair they never expected to.
    The third term was a step too far, as simple as that. You can’t give all students A results, you can’t drop interest rates so everybody can borrow a house, you can’t flood the public sector with additional employees… I could go on. I will go on. I think the Labour party wanted immigration to show their credentials, like a child inviting everybody into their house, but I don’t believe that they believed deep down that it would continue. We live in a country where if a political party said ‘If we get in then we give everybody 10K’, then certainly they would be in. Money grows on trees ( ! it does grow on trees !), but blah…

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  • stillthinking. You are having a laugh, no?
    >>written all over the Labour psyche is the redistribution of wealth from the unfair Tories

    What!! Labour have done more to create a class divide than the tories managed. Labour have created a detached generation, that can no longer afford to get a foot on the property ladder, have to pay to be educated, are constantly told that they must start saving for a pension because by the time they reach retirement the pension will be of little value to them. So now we turn to the baby boomers, who have used equity to invest for their pension at the complete expense of the younger generation. The redistribution of wealth under Labour has quite simply been staggering.
    It is difficult to find anything positive about their 10 years in Government and it is quite clear that they are completely without direction and focus. As a party they are currently writhing in their death throes. At least if coward Gordon had called an election somebody could have put Labour our of their misery. At present we have to endure another 2 more years of Labours festering corpse stinking the place out.

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