Widening gap between income and needs

Fin24
2013-06-30 14:12
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Cape Town – There may be a growing gulf between what people expect their living standards to be and their ability to achieve it.

The Bureau for Economic Research inflation expectations survey, conducted for the South African Reserve Bank, showed expectations for 2014 rose to 6.1% in the second quarter, from 6% in Q1.

South Africa’s consumer price index (CPI)‚ which the Reserve Bank uses to target inflation‚ was 5.6% year on year in May after a 5.9% y/y increase in April‚ Statistics SA (Stats SA) said on Wednesday.

In the food and non-alcoholic beverages index fish increased by 1.1%‚ bread and cereals by 0.6%‚ milk‚ eggs and cheese by 0.3%‚ oils and fats by 0.3% and hot beverages by 0.2%.

The household contents and services index increased by 0.1% between April 2013 and May 2013.

The rise in the cost of living and the squeeze on household budgets in the UK are also much worse than the official measures suggest, reported The Telegraph on Friday.

The cost of essential goods and services there increased at a much faster rate than the standard measure of inflation, according to a new report by the Joseph Rowntree Foundation (JRF).

The research found that families have to cope with an "unprecedented erosion of household living standards" as the gap widens between the rising cost of goods and services, and their stagnant wages.

The report outlines the biggest financial pressures on families over the past five years have been energy costs, childcare costs and public transport costs.

Food and rent in social housing had also risen since 2008 according to the foundation's calculations.

The Office of the Children's Commissioner for England estimated  that the British government’s spending cuts and tax and benefit changes will push more than half a million children into poverty by 2015.

Donald Hirsch, author of the report, said there is a "growing gulf" between what people expect their living standards to be, and their ability to achieve it.

"This year's report demonstrates how the price of a basket of goods needed for an acceptable living standard has risen far faster than average inflation. This has combined with low pay increases to create a widening gap between income and needs," he said.

- Fin24

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