Top Four firm warns of disposable income drop



UK households hoping to find more disposable income in their current accounts at the end of the month will be dismayed to read a report from top four accountants, Deloitte.

The firm released a report this week which shows that tax increases, stagnant wages higher commodity prices would all contribute to Britons having £780 per household less in disposable income than the same time in 2009.

Deloitte also warned it would be 2015 before they felt households would get back to the record levels of 2009, as real earnings in the UK were set to drop for the fourth year in a row, the first time since the 1870s this has happened.

With inflation set to rise as high as 5%, Deloitte warned that real income would only start to increase again towards the end of next year.

Chief economic adviser for the firm, Roger Bootle warned that consumers have no choice but to cut spending, and he thought they would spend 1% less this year, and 0.5% less next, before adding that he thought a Bank of England base rate increase could be dangerous.

“Given high debt and given all the other pressures on consumers and given the state of the housing market, I think even a small increase in interest rates could prove to be very dangerous,” he said.

In a separate study, Reed revealed that private sector job opportunities had fallen by 2% in April, compared with the month before, although banking and tourism slow downs contributed to this.

Reed did note that money paid into workers bank accounts was also 1% less in April than in December of 2009.

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