Economic and market briefing: UK household incomes
0UK households enjoyed a 1% increase in their nominal employment incomes over the fourth quarter of last year and there was also a useful increase in self employment incomes and interest received.
These gains were however slightly offset by higher interest and rent expenses and in particular they were offset by higher tax and national insurance payments, with the result that nominal disposable incomes rose at a 2.5% rate over the fourth quarter.
This was one of the better ‘nominal ‘ results in the last few years but, unfortunately, when the data is adjusted for the rising cost of living, we find that real disposable incomes fell slightly, for the second quarter in succession.
Total expenditure was however similarly subdued and hence the household sector’s financial balance was unchanged, leading to an overall picture of weak-income induced stagnation within the household sector at present, a trend that we may suspect will be broadly continued through 2012.
James Bevan is chief investment officer of CCLA, specialist fund manager for charities and the public sector. CCLA launched The Public Sector Deposit Fund in 2011 to meet the needs of local authorities and other public sector organisations. You can follow James on twitter @jamesbevan_ccla
