The Centre for Economics and Business Research has stated that UK households are more than £2,000 a year worse off than they were in 2007 due to the rising cost of fuel. They are also set to endure a third successive year of falling disposable incomes as rapidly rising oil prices continue to devastate household budgets.
It was previously predicted that real-term incomes would rise in 2012 after two years of declines. But due to the rising oil prices and taxes, it now predicts a marginal 0.1% slide in disposable incomes this year with inflation remaining well above the Bank’s target of 2%.
Adding to this the UK’s real disposable income is looking to be 5.7% lower than 2007 which is the equivalent to incomes being cut by £2,210 over this six year period.
CEBR chief executive Doug McWilliams said: “It looks like quantitative easing is starting to affect GDP growth around the world, and the international economy looks to be temporarily in much better shape than it appeared to be at the turn of the year. But every silver lining has a cloud – in this case the higher energy and commodity prices which are resulting from the combination of uncertainties in the Middle East and QE in Europe and the US, which mean both higher inflation and squeezed real disposable incomes.”