Households are being squeezed as a damning new report suggests that families are £10 worse off a week than a year ago.
According to the Bank of England’s Quarterly Bulletin, disposable household incomes have fallen by a staggering £46 a month in the last year.
Over the last 12 months, the average family’s spending power has fallen by £552! The report found that homeowners with high loan to value mortgages had the most disposable income, and renters had the least.
The report also found that struggling Brits could face another recession. The UK economy has taken a turn for the worse and appears to have slowed down considerably. The key reason for this appears to be that people are not spending sufficiently.
Around half of those reported to have been affected by the current economic climate have been looking for an additional income or working longer hours to make ends meet.
The report also highlighted that households can expect to have their finances stretched further in the future, as the economy shows little signs of recovery.
“Households reported that their income available after paying tax, housing costs, bills and loan payments had fallen, continuing the trend of the past four annual surveys.
“Households also reported that they had been affected by the fiscal consolidation, mainly through lower income and higher taxes,” commented Spencer Dale, Chief Economist and Executive Director - Monetary Analysis and Statistics.
More than half of households said they experienced a fall in their available monthly income. Worries over debt problems have fallen since last year, however, they are still significantly higher than pre-recession levels.
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