Tuesday, July 31, 2012
Income poor but wealth rich
Posted by David Smith at 10:00 AM
Category: Thoughts and responses

The Office for National Statistics has pulled together its material on the household sector, showing that real household income per head fell by 0.6% in the first quarter, to its lowest level since the second quarter of 2005. We've made no net progress for six years, in other words.

The ONS says this is mainly due to the impact of high inflation on real incomes, which offers a degree of hope if inflation continues to fall. In the meantime, household actual spending per head in the first quarter was its second lowest, in real terms, since the third quarter of 2003.

Wealth, however, is slowly recovering. Most people focus only on household debt, but household assets - physical and financial - are also important. Net household wealth rose strongly in 2009 and 2010 and edged up by 0.1% in 2011, to around 7 trillion. In cash terms, we've never been wealthier. More here.