The latest Bank of England survey of households concludes that the UK’s recovery from the recession of 2009 has been slowed by falling consumption reflecting the challenging environment facing households.
The BoE data suggests most households have experienced an income squeeze over the past year, with many responding by looking for a new job or simply working longer hours.
The survey was conducted on 1,985 households and undertaken 23rd – 29th of September (before the worst period of the Eurozone crisis), using computer assisted personal interviewing.
The BoE survey showed 48% of respondents felt the UK government’s budget cuts have affected household income, 34% said they were not “heavily affected” while 18% hadn’t thought about it.
Some 69% of respondents felt government cuts would impact them in the future.
The biggest impact appears to have been from higher taxes, which 23% of people said they had noticed, while 19% mentioned lower income. 7% said they had lost their job although 19% said they expected to lose their job in the future.
The Bank of England noted in their report that: “Unemployment has remained higher than before the recession, and credit conditions are still tight.”
The BoE says its response has been to maintain interest rates at their record low of 0.5% since March 2009 and, as a further stimulus, it has purchased £275 Billion (GBP) in government debt in the process known as Quantative Easing, (QE).
The Chancellor of the Exchequer, George Osborne, believes the UK economy will grow 0.9% by the end of this year, (2011) and just 0.7% in 2012
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