Thursday, 21 June 2012
UK household consumption - no growth
Nobody, apart from Jimmy "the crafty dodger" Carr, has any money these days. And he has all of his locked up in a trust fund.
We certainly aren't spending much. Real household spending growth has been in the tank since the crisis started back in the summer of 2007. Last year - 2011 - was a particularly one when consumption fell in each of the first three quarters. Overall, we are a long way south of the pre-crisis peak in consumption spending. Things aren't likely to get better anytime soon.
Why aren't UK households spending? Dumb question; real incomes are down. Assuming that you aren't in the business of insulting defenceless mentally disabled children and calling the output a carefully crafted joke, then you are probably getting poorer. In 20011, household real post-tax income fell by a growth sapping 1 percentage point.
If only we could all dodge a little tax then perhaps things would get better. Perhaps, Mr. Osborne could arrange it for us by cutting the tax rate when he cooks up his next budget. However, I don't think that idea would go down too well with our liberal tax dodging guardian reading elites.