The Herald on Sunday

The mini-boom is over

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THE UK’s mini living standards “boom” of recent years has ended, with income growth plunging because of rising inflation, a report will reveal this week.

Research by the Resolution Foundation found household income is growing at a “subdued” rate – down to 0.5 per cent, following rises of three per cent in 2014/15 and 1.5 per cent in 2015/16.

The think tank’s annual living standards audit will show low inflation, more jobs and increases in pay drove a “mini-boom” between 2014 and the start of 2016.

But inflation is on the increase and is not being matched by pay rises, the study will show.

The Foundation adds that with inflation set to continue rising over the rest of 2017, and with welfare cuts only just starting to be rolled out, household income growth could further weaken in the coming years, unless action is taken.

Stephen Clarke, spokesman for the foundation, said that “fastrising inflation this year has brought this all too short miniboom to a sharp halt as pay rises have not kept up”.

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