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Families hit by worst wages crash in 50 years....

There has been a stark report issued by the ONS stating that the wages for British workers are falling.  It is clear that the next Conservative government will have to ensure that the recovery is handled carefully to ensure a full economic recovery.

Conservative Treasury spokesman Philip Hammond said: ‘This is disappointing news just before Christmas. Britain remains the last G20 country with a shrinking economy and we have now suffered the deepest and longest recession since the 1930s.‘Gordon Brown’s claim to be leading the world out of recession rings increasingly hollow as the evidence mounts that his policies have failed.’

Yesterday’s 0.2 per cent contraction was slightly better than the ONS’s previous 0.3 per cent estimate.But the news disappointed economists who had expected a fall in gross domestic product of 0.1 per cent - or even a positive number. This is the second revision to the third quarter’s GDP figure. The initial estimate, released in October, showed the economy shrank by 0.4 per cent.

British Chambers of Commerce chief economist David Kern said: ‘While most analysts expect a return to positive growth in the next few months it is important to stress that recovery is not yet guaranteed.’ Although total wages fell, households’ disposable incomes actually rose by an annual 6.5 per cent during the third quarter, because of the impact of falling interest rates, lower tax payments, and higher social benefits and dividend receipts. But instead of spending that extra money, families are saving for a rainy day. Britons saved 8.6 per cent of their incomes during the quarter, the highest ‘saving ratio’ in over a decade.

23rd December 2009