The News Line: News
Saturday, 1 February 2014
IFS points to huge inflation
ANALYSIS by the Institute of Fiscal Studies shows that ‘real median household income in 2013–14 is more than 6% lower than before the economic crisis hit in 2007–08’.
The IFS says that government claims that better-off households have seen bigger proportionate real falls in income than poorer households stands good only if all households face the same average inflation rate.
However, it stresses that ‘the fact is that poorer households have experienced significantly higher rates of inflation’.
While ignoring the fact that low-paid workers have experienced a pay freeze for years, the IFS does point out ‘earnings have grown much less quickly than prices, while benefit rates have largely, until this year, kept up with (the lower) CPI’ inflation rate figure’.
It adds that ‘the poor have experienced higher levels of inflation’.
It points out: ‘Food and energy prices, which form a bigger proportion of the spending of poorer households, have risen much faster than the average.
‘Between 2008 and 2013:
• CPI inflation was 20%;
• energy prices rose by nearly 60%; and
• food prices rose by 30%.’
This is while millions of workers have been on a permanent pay freeze
Abi Adams, the report co-author, said: ‘Different types of households have had quite different experiences of inflation over the past few years.
‘Those on lower incomes have typically experienced significantly greater inflation than those with higher incomes.’
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