Friday, 10 December 2010

A little tighter

The 2010 Annual survey of hours and earnings has been released by the Office for National Statistics, this shows that the median income has dropped by 0.4% this year from £21310 to £21221, if you consider the RPI is 5.4% from April 09 to April 10 then those people on average earners are being squeezed.

Inflation for low to middle earners has been particularly high this year with larger increases in the cost food and fuel which takes a higher proportional of their income, this with greater job insecurity and increasing part time working in this group.

There seems to little hope of an improved situation for the low to middle earners with the Office of Budget Responsibility (OBR) recent report where they have downgraded the levels of growth for the next three years.

The OBR says unemployment will continue to grow to 8% next year, this will mean more job insecurity and more downward pressure on wages with less money to spend in our local economy.

The OBR believes the economy in terms of employment will not be back to where it was in 2008 at the beginning of the recession until well beyond 2015.

The OBR have stated that their growth predictions are uncertain, only the Bank of England are offering higher growth predictions than the OBR, the OECD are much less optimistic about growth for next year.

In the new year we have the 2.5% increase in VAT to 20% to look forward to, with 3 to 400000 of job losses in the public services and we have local government cuts that will take well paid jobs out of our local communities.

The Austerity packages will take growth out of the economy, but "you shouldn't slam the brakes on when the economy is barely growing, if you do you create more joblessness you create higher costs onto the state, the deficit goes up even further and the pain of dealing with it is even greater. So it's completely irrational." (Nick Clegg 1.5.2010)

So 2011 will be a little tighter.

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