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UK disposable incomes set to fall

Disposable income in the UK is set to fall for the third year running, according to an economic think tank.

The Centre for Economics and Business Research (CEBR) suggest that rising food, clothing and fuel prices alongside small pay rises would result in another fall in disposable income.

The real disposable income forecast for 2012 has now been revised to a 0.2% decline, from a broadly flat prediction in 2011. This comes alongside a 1.3% decrease in 2011.

Commenting on the figures, Osman Ismail, lead author of the report commented: “Wage growth is disappointingly anaemic, without much prospect of it picking up in the coming months.

“Unemployment is still high, the double-dip recession has dented confidence, and plenty of public sector cuts are still to come.”

Recent figures indicated that gross pay is increasing at a rate of 0.6%, five percentage points less than the equivalent figure five years ago.

Inflation has fallen to its lowest level in over two years, while high street bargains and cuts in summer air fares controlling and increases.

ONS figures show that the price of living rose by 3% in the year ending April 2012, a 0,5% from the annual rate recorded the previous month.

This was posted in Bdaily's Members' News section by Ruth Mitchell .