Mervyn’s obviously been reading…
They will see their standard of living fall over the next two years as salary freezes and rising inflation eat into incomes, Mervyn King said.
“The patience of UK households is likely to be sorely tried over the next couple of years,” Mr King said, dashing hopes that Britain could recover quickly from the deepest slump in post-war history.
His comments are likely to infuriate Downing Street,
Hey – a sliver lining. Buy Nokia shares.
which had hoped to campaign in the election on having set Britain back on the road to prosperity.
LOL do what??? Jesus titty twisting Christ, have these people got some brass nerve or what??
Here’s a point though. If Labour had “hoped to campaign in the election on having set Britain back on the road to prosperity”, surely they’d HAVE to have the election after Q4 results, but before Q1 results, as I surmised here – i.e. before 23rd April.
Back to the point.
The remarks also included a warning of interest rate rises.
Inflation is now rising almost twice as quickly as average earnings and the figures do not reflect the recent end to the VAT tax cut. With consumers facing even higher prices as a result of rising VAT in January, CPI is likely to go well above 3 per cent in the coming months, Mr King suggested.
Meanwhile, workers have seen salaries contract at an unprecedented rate. Although unemployment has not risen as high as in previous slumps, this has been at the cost of a significant reduction in household pay, with many staff accepting pay cuts, or voluntarily working part-time, to hang on to their jobs.
Mr King said that, although the recession was soon likely to be over in technical terms “there is little scope for growth in real take-home pay, which may remain weak even as output recovers”.
“It is clear that inflation is likely to pick up markedly in the first half of this year, a message reinforced by this morning’s news that CPI inflation reached 2.9 per cent in December . . . the rise in VAT back to 17.5 per cent means that CPI inflation is likely to rise to over 3 per cent for a while, or even higher for even longer were energy prices or indirect taxes to increase further.”
Thanks Gordon. Thank everyone who voted Labour. Thanks to the PLP; the gutless fucks who allowed Gordon a coronation and unobstructed ascent to the helm, KNOWING that he wasn’t up to the job.
Give me strength.