Real national and household incomes have been falling due to a combination of the recession and high inflation. So says analysis published today by the Office for National Statistics (ONS) as part of the Measuring National Well-being Programme.
You won’t find the word ‘stagflation’ in the report, but all the ingredients are there as it finds the following:
• In the second quarter of 2012 net national income (NNI) per head in real terms was 13.2% below its pre-recession level in the first quarter of 2008; a sharper fall in economic well-being than the 7% fall that GDP per head data indicate.
• In the second quarter of 2012, real household actual income per head was 2.9% below its peak in the third quarter of 2009.
• Household incomes have generally been eroded by price inflation, for example in September 2011 inflation peaked at 5.2% whereas the annual rise in household actual income per head was 1.9% in the third quarter of 2011.
• At the end of 2011 national debt was in excess of one trillion pounds, the first time on record, and equivalent to 65.7% of GDP.
Still, as Barclays points out: ‘The situation is not all doom and gloom [...]. With monetary support still in place, and the fiscal stabilisers at play, the substantial fall in inflation seen over the past year should generate some recovery in RHAI (real household actual income) and drive an improvement in economic well-being in 2012-13′.
The report comes before the latest quarterly GDP figures due out on Thursday. These are expected to show that national output grew in the third quarter, bringing to an end the UK’s double-dip recession.
Tags: doom and gloom | double dip recession | gdp figures | gdp per head | household incomes | monetary support | national statistics | price inflation | quarterly gdp | second quarter