In the News
Cost of Living Crisis - Two decades of real pay growth set to be wiped out
The Resolution Foundation is forecasting that households' spending power might fall by £3,000, as up to 3 million households experience fuel poverty.
- According to their report, real earnings are forecast to continue falling until at least mid-2023, by which time all real pay growth since 2003 will have been wiped out.
- Household incomes are on course to fall by 5% this year, and by 6% next year.
- 1.3 million people including 500,000 children could be pushed into absolute poverty next year.
- Relative child poverty is projected to reach its highest level (33% in 2026-27) since the peaks of the 1990s.
The implications of this for spending within the circular flow and the subsequent impact on aggregate demand and economic growth are self-evident.
The Resolution Foundation is one of the organisations pushing for a social tariff on energy bills - part funded by an increase in income tax.
UK factory output slumps at fastest rate since May 2020
Is this sort of data enough to suggest that there's a recession on the way - with factory output slumping at its fastest rate since May 2020. Factor in the fact that this was in the middle of the pandemic and you might draw your own conclusions.
A glimmer of hope
It seems that wholesale gas prices are cooling with a significant decline in the price of gas for Friday delivery, amidst a sense that Europe has plans in place to deal with the prospect of Russian restrictions on gas exports over the winter.