Incomes falling at record rate

INFLATION WIPING OUT ANY PAY GAINS

HOUSEHOLDS have suffered the longest fall in real disposable incomes since records began in 1955, official figures out yesterday revealed.

Soaring inflation has outstripped rising incomes to leave people worse off overall.

The squeeze has consequences for the economy which, experts warn, risks us falling into a recession.

Data from the Office for National Statistics showed households’ nominal disposable incomes – including wages and benefits – grew 1.5 per cent quarter-on-quarter in the first three months of this year.

That was offset by a quarter-on-quarter rise in inflation of 1.7 per cent. The resulting 0.2 per cent fall in real disposable incomes marked the first time on record they have dropped for four quarters in a row.

Myron Jobson, senior personal finance analyst at Interactive Investor, said it left households “less protected against what promises to be an agonising autumn for personal finances, with the energy price cap set to rise again”.

Susannah Streeter, senior investment and markets analyst at broker Hargreaves Lansdown, said: “Lockdown savings are rapidly evaporating, and with inflation set to hit 11 per cent by the autumn and interest rates marching upwards, there are likely to be fewer big spenders in the months ahead.”

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