Growth & Living Standards – the disconnect
The chart below shows the level of GDP and real household disposable income from Q2 2009 until Q2 2013.*
As can be seen, whilst GDP grew by 4.2% over the four years to June, household income barely budged.
In annualised cash terms, GDP grew by £60.8bn over this period but real hosuehold disposable inome expanded by just £1.2bn.
Taking into account of population growth, the picture is even worse. Despite the economy growing by over 4%, RHDI per head actually fell by £484.
The Government argues that the best way to support living standards is simply to get the eocnomy growing again but the evidence of the last four years suggests this may not be enough.
* Q3 2013 figures for RHDI are not yet available.