The reduction in real terms incomes for those at the bottom of the pile will take many years to replace
Inflation as measured by the Consumer Price Index (CPI) has turned negative in the UK for the first time since 1960, standing at -0.1 per cent for the last quarter.
Bank of England governor Mark Carney believes that this will give a boost to household finances and should enable interest rates to remain low for the rest of this year. Carney commented:
“We expect inflation to be very low over the next few months. But over the course of the year as we get towards the end inflation should start to pick up towards our 2 per cent target.
“The British people should enjoy this period of very low energy prices low, very low food prices. Enjoy it while it lasts.”
This complacent outlook, however, signally fails to recognise – wilfully or not – that escalating living costs and stagnant incomes in the UK since the financial crisis hit in 2007, have eroded real incomes and the purchasing power of UK households: especially those at the bottom of the income distribution.
(Click to enlarge)
The chart lays this complacency bare. While CPI ran at 18.9 per cent from 2008 onwards, the rising costs of household essentials like fuel, food and water were significantly higher at 47.3 per cent, 31.5 per cent, and 30.7 per cent respectively for the same period.
Since household essentials take a greater share of spending for low incomes households, the higher inflation associated with these goods and services bites deeper into incomes already denuded by benefit caps, wage stagnation and the growth of ‘zero hours’ working.
Of course the slowdown of inflation for household essentials will provide some relief for people on low wages and benefits. But the reduction in real terms incomes for those at the bottom of the pile since 2007 will take many years of wage and benefit growth to replace.
With no signs of wages pick-up in the bottom quartile of the income distribution, and £12bn more welfare cuts to come, this seems unlikely. Perpetual poverty seems the best that low income people can expect.
Kevin Gulliver is director of Birmingham-based research charity the Human City Institute and chair of the Centre for Community Research. He writes in a personal capacity
19 Responses to “Negative inflation has come too late to help the poor”
stevep
a.) The church and science parted company centuries ago. Before then, when the global population was small and mostly tribal (large and small, including formative countries), nature was seen as more of a partnership with humanity, with gods and deities to be appeased in return for bountiful hunting and crops. Wise people understood if we took more than we needed, the balance would be upset.
When Christianity and it`s one true God made inroads (usually via brutality and persecution) into these belief systems, the partnership with nature was broken, favouring instead the doctrine that mankind was put on this earth to dominate over other species and to use it`s bounty as it saw fit. Science developed other theories such as Darwinism to explain nature and developed methods of exploiting it more efficiently.
b.) Paedophilia and the church seem to trip of the tongue like ” bow and arrow” or “dog and bone” quite a lot these days. Centuries of promoting sexual denial and repression by Christianity (and some other religious doctrines) have led to widespread deviant sexual practises by not only the wider population, but by some of the very priests, gurus and other religious eminents that forbade them.
c.) Christian Bakers or any other religious-minded bakers or candlestick makers presumably serve the wider community, not just themselves. They therefore subject themselves to the needs and wishes of the wider community.
d.) Religion dominated European thinking for centuries, and still does in large parts of it. Christianity, in it`s many forms, brainwashed, tortured, burned, hanged and indulged in ethnic cleansing all over Europe until fairly recent times. Thankfully, it`s influence on the wane and we can make rational decisions based on logic, reason and humanity whether we want to be part of Europe.
Christianity and other religions have decent principles at the heart of all of them. it is just that they have been usurped and warped by power-hungry despots controlling them and by extension, seeking to brainwash and control others to suit their own ends.
steroflex
I could have written all this for you I have heard it so many times and always at about the same length.
Am I allowed to disagree with you on any of the four points I mentioned above? Am I?
PS I find it very difficult to take anyone seriously who cannot spell or was it just a couple of typos?
stevep
Please comment if you wish, sarcasm is optional.
Please feel free to agree or disagree with any of the points I`ve raised, it`s about time someone saw fit to discuss them.
Please feel free to take me seriously or not.
I`m always up for help with mi spelingg, please feel free to correct my errors.
Mike Stallard
Steve, I do not think we are at all on the same wavelength.
To me, you seem to be falling into the trap which Christians of all stripes have to avoid at all costs: banging on without listening. I have heard your sermon so many times that you remind me of the old street preachers (now banned) who rabbited on and on without an audience thinking that the cliches they proclaimed were cutting edge. I was not, actually, being sarcastic: I was in fact telling the truth. I really could have written all this for you. It is not about time someone saw fit to discuss them, that has been done ages ago.
OK Here are some hints:
1. The Pope has already accepted Darwinism.
2. We had a nasty case of suspected paedophilia in our Church. It was dealt with immediately and very efficiently and very tactfully within one month. It did not involve our priest.
stevep
The church accepted Darwinism kicking and screaming because it faced extinction of it`s own species if it didn`t. Darwinism is still vilified by Christian fundamentalists. Their kids are still brainwashed. The church, in the face of irrelevance, has become wily and pragmatic, ordaining women through gritted teeth – the issue still splits the church. grudgingly accepting gay marriage, in fact any marriage will do to boost the takings, most couples only want nice photos outside the church anyway, most of them returning only when it suits.
As for Paedophilia within the church, Oh dear, you seem to be in as big a state of denial as it has been since it was rumbled. Did not the last pope resigning and the new pope vowing to clean up the church give you a clue? Or the revelations in Ireland? I could go on and on but I`m not in the business of telling you things you already know.
Finally, do re-read the final paragraph in my post, the one where I said “Christianity and other religions have decent principles at the heart of all of them”. I meant it. It`s just that they have been put to one side in favour of power, control and piousness.