Monday, April 11, 2011

Biggest Drop In British Disposable Income Since 1921

The Telegraph has a headline that claims that "UK disposable income falls to lowest since 1921", but actually that's not really true. The level of real disposable income is far higher than in 1921, but the yearly decline is forecasted to be the biggest since 1921, and that's of course bad enough.

It would be interesting to see a measure of real disposable income excluding taxes and transfer payments. That would give us an idea of to which extent this drop reflects the government's austerity measures and to which extent it reflects economic weakness.