Disposable household incomes are reportedly declining at their quickest rate in six years across the UK. The Office for National Statistics was the first organization to make the alarming discovery. According to the report, the nation hasn’t seen such economic hardship since 2011.
Causes For The Decline
After taxes and benefits are recorded, families’ disposable incomes fell by 2% from 2016. The ONS believes the decline is tied directly to the increased prices of goods. Since talk of an exit of the European Union began, exporters decided to raise the rates of many necessities. UK citizens now face an uphill climb to return the economy to normalcy thanks to the Brexit vote.
Rising inflation along with slow wage growth have hit families hard across the nation. The inflation rate of 2.9% is the highest since 2013. The pound’s weakness was exposed after the EU referendum took place a year ago. Households fear the pound won’t recover until a full exit is complete, which could be 2-3 years away.
Local government has made attempts to revive the economy since talk of Brexit began. A higher minimum wage for workers over the age of 25 has been established. This law was instituted jut last year and dubbed the “national living wage.” Taxpayers also carry less of a burden than they did several years ago.
Brexit Talks Update
Meanwhile in Brussels, the Brexit negotiations continue between the Union and the UK. The latest bit of negotiations centered on trade. EU leaders have warned Britain that trade will be difficult if the territory leaves the union. If negotiations continue to hit bumps in the road, the EU may severely weaken the UK’s overall economy. While the EU maintains that it is not punishing Britain for its exit, the union continues to take a hardball stance on nearly all matters. Japanese Prime Minister Shinzo Abe was the voice of reason, saying he hopes the negotiations will lead to economic predictability throughout Europe.