You are here: Home - News -

UK’s short-term living standards boom ends

by:
  • 30/01/2017
  • 0
UK’s short-term living standards boom ends
Fast-rising inflation has put an end to the UK's mini boom in living standards, according to the Resolution Foundation.

The think-tank said the mini boom between 2014 and the beginning of 2016 was driven by historically low inflation, a long overdue return to wage growth and rising employment.

It said typical working age household incomes grew at their fastest rate since the early 2000s during the boom.

However, it said the living standards story of this year has been fast-rising inflation, which reached 1.6% in late 2016 without nominal pay growth rising by enough to match it.

As a result the Foundation estimated working-age household incomes will grow by just 0.5% this year (2016-17), down from 1.5% in 2015-16 and 3% in 2014-15.

In more welcome news, lower mortgage rates meant housing costs have not been dragging on income growth as they did in the mid-2000s, and pensioner incomes are growing more strongly.

The Foundation said with inflation set to continue rising over the rest of 2017, and with welfare cuts only just starting to be rolled out over the parliament, household income growth could further weaken in the coming years, unless action is taken.

Stephen Clarke, economic analyst at the Resolution Foundation, said: “While there’s little that the government can do to stop rising inflation eating into people’s living standards this year, there is still plenty of scope to boost pay packets and get employment rising again.

“Closing the large jobs gaps that still exist across big cities like Birmingham and Liverpool would boost household incomes and help send Britain to the top of the global employment league. And of course tackling Britain’s chronic productivity problems holds the key to maintaining decent pay growth in the years ahead.”

There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.

Profiles

Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.

Marketwatch

Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.

Poll

Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
Read previous post:
/IMG/267/113267/doug-crawford.JPG
Average remortgage in East Midlands doubles

Increased remortgage activity is being driven by homeowners taking equity out of their properties to raise capital, according to My...

Close