PanamaTimes

Monday, May 20, 2024

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

PanamaTimes
0:00
0:00
Close
El Salvador's Bitcoin Holdings Reach $350 Million
Teens Forming Friendships with AI Chatbots
WhatsApp Rolls Out Major Redesign
Neuralink's First Brain Implant Experiences Issue
Apple Unveils New iPad Pro with M4 Chip, Misleading AI Claims
OpenAI to Announce Google Search Competitor
Apple Apologizes for Controversial iPad Pro Ad Featuring Instrument Destruction
German politician of the AFD party, Marie-Thérèse Kaiser was just convicted & fined $6,000+
Changpeng Zhao Sentenced to Four Months in Jail
Biden Administration to Relax Marijuana Regulations
101-Year-Old Woman Mistaken for a Baby by American Airlines: Comical Mix-Up during Flight Check-in
King Charles and Camilla enjoying the Inuit voice singing performance in Canada.
New Study: Vaping May Lower Fertility in Women Trying to Get Pregnant
U.S. DOJ Seeks Three-Year Sentence for Binance Founder Changpeng Zhao
Headlines - Thursday, 23 April 2024
Illinois Woman Wins $45M Lawsuit Against Johnson & Johnson and Kenvue for Mesothelioma Linked to Baby Powder
Panama's lates news for Friday, April 19
Creative menu of a Pizza restaurant..
You can be a very successful player, but a player with character is another level!
Experience the Future of Dining: My Visit to an AI-Powered Burger Joint
Stabbing rampage terror attack in Sydney, at least four people killed, early reports that a baby was among those stabbed.
Iran fired more than 300 drones and missiles at Israel overnight. Israel Reports Light Damage After Iran Launches Large Strike.
I will never get enough of his videos and the pure joy and beauty of these women!!
Scientists at the University of Maryland have developed an "invisibility cloak", for AI using adversarial patterns on a sweater, making the wearer nearly undetectable to standard object detection methods.
Lamborghini Bids Farewell to Its Best-Selling Sports Car: The Huracán
Sam Bankman-Fried Appeals 25-Year Prison Sentence for $8bn FTX Fraud
OJ Simpson, ex-NFL star who was acquitted of murder, dies aged 76
British Backpacker Imprisoned in Notorious Bolivian Prison: Family Raises Funds for Legal Fight and Essentials
Argentina: Venezuela Cuts Power to Embassy after Opposition Meeting
El Salvador Offers 5,000 Passports to Skilled Foreign Workers: Tax-Free Relocation and Citizenship
Panama Papers Trial Begins: Founders of Mossack Fonseca Face Money-Laundering Charges
75 Becomes the New 65: Retiring in Your 60s Unrealistic as Life Expectancy Increases and Costs Rise
Total Solar Eclipse of 2021: 32 Million Witness the Mystical, $1.5bn Spectacle Sweep Across North America
New shopping experience…
New world, new reality, let’s get used to it
UK Company Passes Milestone in Developing Space-Based Solar Power, Aiming to Power a Million Homes and Provide Constant Energy
Mexico Breaks Diplomatic Ties with Ecuador after Police Storm Embassy, Arrest Former Vice President
Monty Python were so ahead of their time
If there's a will, there's a way!
Rules about how to dress are important, but not so much if you have a lot of money.
Body Armor Firm Showcases Stab-Proof Vest in Demo on CEO
Mexico Cuts Diplomatic Ties with Ecuador After Embassy Stormed in Quito
Here is a tattoo idea, for engineers
Zoraya Ter Beek, a 28-year-old woman from the Netherlands, will undergo euthanasia in May due to severe mental health challenges
Here's a video featuring Fidel Castro, where he discusses his stance against war and his commitment to preserving life, positions that have put him at odds with the USA:
Woman reaches behind and steals gun from a security guard and shoots three people while getting detained in Chile
Take a walk around the safe and thriving downtown San Salvador.
Joe Biden criticised by Trump campaign for declaring Transgender Day of Visibility on Easter Sunday
Macron says France will help Brazil develop nuclear-powered submarines
A video demonstrating women's self defense class in 1930
×