High inflation, high taxes and slow wage growth mean that UK’s ecomomic recovery will be a lengthy process, research has suggested.
In fact, the post recession pick-up in consumer spending will be the slowest it’s been for two centuries.
Analysis by the Financial Times shows that in four years’ time, UK households will be spending only 5.4% more than they did in 2008.
After the 1980s recession, the spending rebound was 20%, and it was 15% after the 1990s downturn.
Economist Simon Kirby of think-tank the National Insitute for Economic and Social Research (NIESR) told the FT:
‘Real disposable incomes are expected to drop by 1.3% in 2011 after a 0.8% decline last year. The recession may have been relatively benign but the recovery is going to be particularly awful.’