Weak pound has made imported goods more expensive
Real disposable incomes grew just 0.2 per cent in the third quarter of 2017 from the previous three months as the weak pound continued to fuel inflation, the Office for National Statistics (ONS) said today.
The pound has fallen in value since the UK voted to leave the EU, making imported goods more expensive.
In its Quarterly National Accounts, ONS also revealed how Britain’s GDP grew 0.4 per cent in the quarter, unchanged from the previous estimate.
Latest figures show that inflation hit 3.1 per cent in November, but pay rises are failing to keep up.
Average weekly wages went up by only 2.3 per cent in the three months to October from a year earlier.
Consumer spending rose 1 per cent year-on-year in the July-to-September period, the lowest in more than five years, the ONS stated.
The ONS added that UK households’ expenditure had exceeded income for four quarters in a row, suggesting that people are dipping into savings to fund their spending.