UK Households face a drop in Disposable Income

UK households are in for some tough times as disposable income is expected to drop this year equivalent to about £780 per household. According to the top financial advisory firm Deloitte, government tax rises and spending cuts combined with higher commodity prices pushing up inflation are the attributing factors to such a decline.

It will take until 2015 for households to get back to the levels of 2009 peak, the firm added. Real earnings are expected to fall for the fourth consecutive year. Deloitte expects real incomes to begin rising again only by the end of 2012, while inflation is expected to hover around 5%. The consumers have no option but to cut their spending in order to stay afloat during these tough times.



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