Duncan Weldon
RPI inflation is at its highest since June 1991 and the level of unemployment is at its highest since October 1994.
These are shocking statistics. Sometimes it’s hard to remember we are nearly two years into the ‘recovery’ from recession. For many people the current situation feels an awful lot worse than even the darkest days of September 2008:
- Whilst RPI is rising at 5.6%, regular pay is growing by only 1.6% and total pay (including bonuses) at 2.2% – either way this represents a huge squeeze on the earnings of those in work.
- Unemployment stands at over 2.5 million, up over 100,000 over the past year
- Household consumption has fallen for the past four quarters.
- The Chancellor now seems to hinting that benefits will not be uprated by inflation – a major blow to those already struggling to make ends meet after.
- Consumer confidence remains depressed.
This certainly doesn’t feel like a recovery for those in work or those out of it – incomes are falling, households are cutting back their spending and the economy hasn’t grown for nine months.
Comment made by gastro george on Oct 18th 2011 at 3:23 pm:
It would be interesting to see the pay figures by decile, and see whether the low paid get 2.2%, or whether what pay increases there are, are going to the relatively affluent.
Trackback made by An ever tightening prospect? | hopisen.com on Oct 19th 2011 at 2:09 pm:
[...] question for those peturbed, as most of us are, by the disturbing rise in inflation we saw yesterday. What does the 2011 version of “Whip Inflation Now” look [...]
Comment made by jonathan on Oct 19th 2011 at 5:14 pm:
I wish I could understand UK inflation. It’s a mystery to me. Is the UK capacity constrained for export? (That could be both nominal and effective capacity, meaning some capacity needs modernizing.) Given the state of affairs, I can see some effect of VAT but this? The US has similar commodity price issues and much lower inflation.
I can’t agree it’s due to the now years old relative decline in currency value. Am I wrong?
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