Further encouraging signs were seen in the latest figures released by the Office for National Statistics (ONS) that showed average real household income* rise by £69 to £4,510 in the April – June Quarter of 2012.
This represents an increase of 1.6% from the previous quarter and is the highest figure since the fourth quarter of 2010. Given that real household incomes were at their lowest level for five years at the end of 2011, this boost will, hopefully, contribute to the anticipated bounce in the UK economy during Q4 2012 and into 2013 through an increase in consumer spending.
With the latest inflation figures (CPI at 2.2%) reducing as well, this should ease the burden on household income, even though their actual expenditure has held relatively unchanged during the same period, falling by £7 (0.2%) over the period.
One of the negative effects of lower inflation figures, however, is that those on benefits will be receiving increases of less than half they did last year, as any annual increase
Household savings have also increased to £18.2bn, an increase from the previously reported £16bn. This reflects the emphasis many households have placed upon reducing their debt burden.
There were, of course, major regional variations in these figures. Annual real household income reported saw the richest area – London – recording a figure of £20,238 with inner London west heading the pack at £33,323 and the poorest region – the North East – reporting a figure of £13,329, with the city of Nottingham reporting the lowest figure of only £10,702. Across the whole of the UK the annual average was £15,709.
*Real household income is defined as wages and salaries (both employed and self-employed), pension receipts, state benefits, interest on savings, and dividend income.
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