Sunday, September 16, 2012
Good news on the horizon
This morning's Independent on Sunday highlights a new report that indicates that better times may be on the horizon.
They refer to a Centre for Economics and Business Research study (CEBR) that says that households will enjoy the first increase in real income next year for the first time since the credit crunch struck, and it will be middle-income earners and poorer families that will benefit the most:
It predicts that families will enjoy a much-needed increase in income - after the impact of inflation - next year as stubbornly high inflation recedes and as it forecasts a welcome return to economic growth.
Real incomes for middle income and poorer households have fallen every year since the start of 2008 and are set to drop again this year by 0.2% due to slow wage growth and high inflation.
But this is set to change as the economy recovers, with the CEBR forecasting growth of 0.5% next year.
Its research suggests that real incomes will rise by 1% for middle-income households and by 1.5% for poorer households - with the richest households seeing a less impressive 0.7% rise.
Similar rises are expected for 2014 and 2015, the CEBR said.
It believes the rich will see their incomes grow the slowest despite the 5p reduction in the top income tax rate, due for April 2013, because top-end pay and bonuses are expected to be squeezed in 2013 and some tax allowances are also being scaled back.
This does not mean that things will be easier. Conditions will still be tough, however the further income tax cuts led by the Liberal Democrats and due to come in next year will also help.
They refer to a Centre for Economics and Business Research study (CEBR) that says that households will enjoy the first increase in real income next year for the first time since the credit crunch struck, and it will be middle-income earners and poorer families that will benefit the most:
It predicts that families will enjoy a much-needed increase in income - after the impact of inflation - next year as stubbornly high inflation recedes and as it forecasts a welcome return to economic growth.
Real incomes for middle income and poorer households have fallen every year since the start of 2008 and are set to drop again this year by 0.2% due to slow wage growth and high inflation.
But this is set to change as the economy recovers, with the CEBR forecasting growth of 0.5% next year.
Its research suggests that real incomes will rise by 1% for middle-income households and by 1.5% for poorer households - with the richest households seeing a less impressive 0.7% rise.
Similar rises are expected for 2014 and 2015, the CEBR said.
It believes the rich will see their incomes grow the slowest despite the 5p reduction in the top income tax rate, due for April 2013, because top-end pay and bonuses are expected to be squeezed in 2013 and some tax allowances are also being scaled back.
This does not mean that things will be easier. Conditions will still be tough, however the further income tax cuts led by the Liberal Democrats and due to come in next year will also help.
Comments:
This is so deadly serious and yet very few in the British media has picked it up...
With $40 billion (yes, $40,000,000,000 per month) now being printed PER MONTH with no end in sight by the US Feds will lead to more of this:
http://www.guardian.co.uk/business/economics-blog/2012/sep/18/high-inflation-uk-doldrums-cpi
In fact, a LOT more of the above.
The real estate guys and stock brokers love this huge money printing stuff - it bucks up stock and real estate prices (and commodity prices climb above normal inflation rate) so on paper it looks real cool, but spending power is hurt and those who are not rich and own lots of stocks and/or property are hurt far more since a greater portion of their income is spent on basic commodities like bread and vegetables.
... and this lead to higher gas/petrol prices ... and a lowering in the value of the US dollar which in a perverse way helps the USA because those US creditors like China with huge $ holdings are worth less. Also, those with loans, if they keep their jobs and interest rates don't go through the roof, might be better off, but a LOT of 'ifs' and that means 'more uncertainty' which is not good for job creation.
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Yes, but QE3 in the USA will likely lead to new inflation in world commodities like oil which feeds into inflation in food prices etc. Printing some $20 billion per month of new money by the US will inevitably lead to inflation - essentially the US is sucking in capital from entities that hold large stock-piles of US dollars. Thanks world for helping us out.
# posted by 
: 6:03 PM
: 6:03 PM
opps - make that $40 billion per month... with no end in site.
So the purchasing power of the US dollar will drop making US exports cheaper and imports (into the US) more expensive.
EU exports to the USA will suffer, which includes UK exports to the USA, which will also suffer.
So this 'good news on the horizon' is already obsolete.
So the purchasing power of the US dollar will drop making US exports cheaper and imports (into the US) more expensive.
EU exports to the USA will suffer, which includes UK exports to the USA, which will also suffer.
So this 'good news on the horizon' is already obsolete.
# posted by : 10:16 PM
: 10:16 PMThis is so deadly serious and yet very few in the British media has picked it up...
With $40 billion (yes, $40,000,000,000 per month) now being printed PER MONTH with no end in sight by the US Feds will lead to more of this:
http://www.guardian.co.uk/business/economics-blog/2012/sep/18/high-inflation-uk-doldrums-cpi
In fact, a LOT more of the above.
The real estate guys and stock brokers love this huge money printing stuff - it bucks up stock and real estate prices (and commodity prices climb above normal inflation rate) so on paper it looks real cool, but spending power is hurt and those who are not rich and own lots of stocks and/or property are hurt far more since a greater portion of their income is spent on basic commodities like bread and vegetables.
... and this lead to higher gas/petrol prices ... and a lowering in the value of the US dollar which in a perverse way helps the USA because those US creditors like China with huge $ holdings are worth less. Also, those with loans, if they keep their jobs and interest rates don't go through the roof, might be better off, but a LOT of 'ifs' and that means 'more uncertainty' which is not good for job creation.
# posted by : 2:41 PM
: 2:41 PM<< Home
