Thursday, February 21, 2013

Real wage stagnation, where it hurts

Tim Morgan is the independent thinking, ultra-bearish head of Global Research at Tullett Prebon, and he has been putting out some fascinating notes of late. If you are uplifted by the idea of the upcoming Spring and Summer, and everything is breezy and joyful and you want to keep it that way, do not read his works. On the other hand, if you want some depressing thoughts to continue the winter blues, carry on over to his site. His latest piece marks the launch of a UK inflation index that captures essential items only:

  • Food, alcohol and tobacco 
  • Council tax, water charges and home insurance 
  • The costs of domestic heating and power, principally gas and electricity 
  • Fuel, road tax and vehicle insurance 
  • Train, bus and other public transport fares 
Comparing how the price of this basket of goods has changed over the years versus growth in income is sobering:


You could add rents into the picture, which I imagine wouldn't make things look any nicer.

With inflation expectations ticking up, I can say with some confidence that we move ever deeper into the great stagnation!

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