PanaTimes

Thursday, Mar 23, 2023

UK Standard of Living Falls as Recession Deepens Amid Inflation Crisis

UK Standard of Living Falls as Recession Deepens Amid Inflation Crisis

The dual effects of the COVID-19 pandemic and the energy crisis caused by sanctions on Russia have rattled consumer confidence and sent inflation soaring — prompting a wave of strikes over pay that have further hit the retail and hospitality sectors.
British families have seen their standard of living fall for a fourth quarter in a row as double-digit inflation cuts into their spending power.

New figures from the UK's Office for National Statistics (ONS) released on Thursday said disposable income had fallen by an average 0.5 per cent in the July-September period — while real-terms incomes had fallen by 3.1 per cent compared to a year earlier.

The Office for Budget Responsibility (OBR), which advises the treasury and the chancellor of the exchequer, has predicted earnings will be eroded by seven per cent over two years to the first quarter of 2024, which would effectively turn the clock back a decade on spending power.

At the same time, Gross Domestic Product (GDP) fell by 0.3 per cent quarter-on-quarter, slightly more than the predicted 0.2 per cent drop.

Overall, the ONS said the economy had shrunk by 0.8 per cent compared to before the pandemic — twice the previous estimate of 0.4 per cent.

Thomas Pugh, an economist at the audit, tax and consulting firm RSM UK, said the economic slump could be worse than that during the early-90s global downturn.

""The UK is almost certainly already in a year-long recession that may prove to be deeper than that experienced in the early 1990s," Pugh said. "The squeeze on household real incomes will intensify as rising interest rates join soaring inflation."

Inflation, fuelled by a combination of fiscal easing during the COVID-19 pandemic lockdown slump and the energy crisis caused by Western sanctions on Russia, is currently running at their highest in over 40 years.

The Consumer Price Index (CPI) rate was 10.7 per cent year-on-year in November, down from 11.1 per cent the previous month. When housing costing costs were factored in, the rate was 9.3 per cent, down from 9.6 per cent in October.

That has provoked a wave of strikes across multiple sectors of the economy, from transport and post to dockworkers, now joined by nurses and ambulance staff in the last week before Christmas — seriously affecting retail and hospitality business.

Trade union members have rejected pay offers of around five per cent as an effective wage cut, while state and private-sector employers insist they cannot afford more.

Consumer spending also fell in the third quarter, by 1.1 per cent. Business investment was down by 2.5 per cent, far more than expected.

On the plus side, the number of people aged 16 to 64 in employment rose slightly on the same time last year, to 75.6 per cent — although that figure includes part-time and zero-hours contract workers who are paid for as little as one hour per week. The ratio of directly-employed to self-employed people also rose.

Deepening Recession

Meanwhile the Confederation of British Industry (CBI), the body that represents big business in the UK, warned that the recession would only deepen in the fourth quarter — traditionally the season of Christmas splurging.

It said economic activity had fallen in the fourth quarter twice as fast as in the previous three months, despite an extra bank holiday in September for Queen Elizabeth II's funeral depressing third-quarter takings.

“Underlying momentum remains poor,” the CBI's report said on Thursday. “Hints of a downturn in our surveys chime with recent GDP data.”
Newsletter

Related Articles

PanaTimes
Close
0:00
0:00
Donald Trump arrested – Twitter goes wild with doctored pictures
NYPD is setting up barricades outside Manhattan Criminal Court ahead of Trump arrest.
Credit Suisse's Scandalous History Resulted in an Obvious Collapse - It's time for regulators who fail to do their job to be held accountable and serve as an example by being behind bars.
Paris Rioting vs Macron anti democratic law
'Sexual Fantasy' Assignment At US School Outrages Parents
The US government has charged Chinese businessman Guo Wengui with leading a $1 billion fraud scheme that cheated thousands of followers out of their money.
Credit Suisse to borrow $54 billion from Swiss central bank
Russian Hackers Preparing New Cyber Assault Against Ukraine
"Will Fly Wherever International Law Allows": US Warns Russia After Drone Incident
If this was in Tehran, Moscow or Hong Kong
TRUMP: "Standing before you today, I am the only candidate who can make this promise: I will prevent World War III."
Drew Barrymore
China is calling out the US, UK, and Australia on their submarine pact, claiming they are going further down a dangerous road
A brief banking situation report
Lady bites police officer and gets instantly reaction
We are witnessing widespread bank fails and the president just gave a 5 min speech then walked off camera.
Donald Trump's asked by Tucker Carlson question on if the U.S. should support regime change in Russia?.
Silicon Valley Bank exec was Lehman Brothers CFO
Elon Musk Is Planning To Build A Town In Texas For His Employees
The Silicon Valley Bank’s collapse effect is spreading around the world, affecting startup companies across the globe
City officials in Berlin announced on Thursday that all swimmers at public pools will soon be allowed to swim topless
Fitness scam
Market Chaos as USDC Loses Peg to USD after $3.3 Billion Reserves Held by Silicon Valley Bank Closed.
Senator Tom Cotton: If the Mexican Government Won’t Stop Cartels from Killing Americans, Then U.S. Government Should
Banking regulators close SVB, the largest bank failure since the financial crisis
Silicon Valley Bank: Struggles Threaten Tech Startup Ecosystem"
Man’s penis amputated by mistake after he’s wrongly diagnosed with a tumour
In a major snub to Downing Street's Silicon Valley dreams, UK chip giant Arm has dealt a serious blow to the government's economic strategy by opting for a US listing
It's the question on everyone's lips: could a four-day workweek be the future of employment?
Is Gold the Ultimate Safe Haven Asset in Times of Uncertainty?
Spain officials quit over trains that were too wide for tunnels...
Corruption and Influence Buying Uncovered in International Mainstream Media: Investigation Reveals Growing Disinformation Mercenaries
Givenchy Store in New York Robbed of $50,000 in Merchandise
European MP Clare Daly condemns US attack on Nord Stream
Former U.S. President Carter will spend his remaining time at home and receive hospice care instead of medication
Tucker Carlson called Trump a 'demonic force'
Kamala Harris: "The United States has formally determined that Russia has committed crimes against humanity."
US Joins 15 NATO Nations in Largest Space Data Collection Initiative in History
White House: No ETs over the United States
U.S. Jet Shoots Down Flying Object Over Canada
Nord Stream terror attack: David Sacks breaks down Sy Hersh's story
Being a Tiktoker might be expensive…
Miracle: El Salvador Search and Rescue teams, with the support of Turkish teams, rescued a woman and a child from the rubble 150 hours after the earthquake
SpaceX, the private space exploration company, made a significant breakthrough in their mission to reach space.
China's top tech firms, including Alibaba, Tencent, Baidu, NetEase, and JD.com, are developing their own versions of Open AI's AI-powered chatbot, ChatGPT
This shocking picture, showing how terrible is the results of the earthquake in Turkey
President Joe Biden delivered the 2023 State of the Union Address , in order to help Americans that missed the 2022 speech, do not have internet, and suffer from short memory.
The desk of King Carlos Alberto of Sardinia has many secret compartments
Today's news from Britain - 9th February 2023
China has declined the US's request for Defense Secretary Lloyd Austin to speak with Chinese Defense Minister Wei Fenghe after the US Air Force shot down a suspected Chinese spy balloon, according to the Pentagon
×