UK Standard of living goes down: may deteriorate further: Finance Trading Times

UK Standard of living goes down: may deteriorate further

In one of the most blunt and blatant statements issued by the Governor of Bank of England (Equivalent to Fed in US or RBI in India), Mr. Mervyn King, has issued a formal warning to the UK citizens about the deteriorating status of standard of living that has gone down significantly in the past few months and he warns that the situation may deteriorate further.

The statement from the Bank of England Governor cites the reasons of “rising food prices, sky-rocketing fuel costs, inflation and unaffordable interest rates on housing finances”.

Britons have enjoyed a decade of high spending on luxury goods, holidays and second homes, fuelled by low interest rates, easy credit and near-record lows in living costs. Inflation is UK has hit the seven months highest value, where in the fuel price inflation is at around 19.5%, its second highest in the decade that starts from 1997 to 2008.

Though the governor indicated that Britons may expect further rate cuts, but the cut will not be substantial in value to help the falling economy. He cited that though there have been many rate cuts offered by Bank of England, but it is not surprising that the mortgage lenders and other loan offering organizations are not passing on the benefit to the citizens, because all of them are perceiving tougher economic conditions ahead, where things may go from bad to worse.

Sending a warning to families who expect the value of their home to increase in the coming years, Mr King added: "Looking several years ahead, there’s no reason to expect house prices to be markedly above where they are now. It’s conceivable there might be falls in house prices."

The falling standard of living is just a precursor.
Gone are the days when people used to spend lavishly on fancy gadgets, new cars, second homes and other costly accessories. It’s time now to worry about the basic necessities of life – paying the monthly bills may turn out to be problematic for many people. As per a study by “The Daily Telegraph”, the household bills have gone up by GBP 1300 per year. Table of Contents
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