The continuing global economic crisis is hitting the poorest households in the UK worst of all as families continue to find the cost of living increasing above the rate their wages are. This means that they have to make up for the gap in their incomings and outgoings by taking on more debt, such as through a credit card or a payday loan.
With the economy looking like it will move into a triple-dip recession, there doesn’t seem to be much hope of this situation changing either. That means that people will simply find it harder and harder to stay ahead financially.
However, this picture isn’t true across the board. For households with higher incomes, the news is actually becoming more positive, despite the economic situation overall looking as if it will worsen. Why this is happening hasn’t been explained, but the continued squeeze on the poor looks set to increase whilst the rich are let off the hook, as senior economist at Markit Tim Moore makes clear: “There was no let-up in the squeeze on UK household finances during February, as higher living costs and muted wage trends combined to reduce cash availability at the fastest pace since mid-2012.
“Worsening consumer finances are likely to further rein in spending on the high street and to complete this circle latest survey data showed that retail sector workers were the most downbeat about their job security and workplace activity in February. The lowest income households saw their financial situation move in an entirely different direction to the highest earners in February.”
There has been repeated criticism throughout the last few years that the worst off in society were shouldering the pain of recession more than those who were well-off, and news like this will only reinforce that belief. It seems the recession may only be a recession for those at the bottom.