Will the Autumn Statement help ease the squeeze?

” Our latest survey finds that four in 10 people think the economy will grow next year. It was just one in five people at this point last year.”

Forgive me for being dense but I cannot understand why the two related figures are quoted in two different scales. Is not one out of five the same as two out of ten?

Statistics are always open to abuse and I think it important that the matter is not made more opaque by using different scales. I am of course excited there has been 100% improvement in peoples sentiment on the likelihood of growth. : )

An interesting point from the Autumn Statement : “A combination of low interest rates and some improvement in house price affordability means that mortgage costs are close to historic lows. Mortgage repayments average 27% of household disposable income, compared with almost 50% in 2007 and a long-term average of 36%. Mortgage interest rates would need to rise by almost 4 percentage points for interest payments to reach the same proportion of income as in 2007.” Yet, despite this, an awful lot of households are feeling very badly off, obviously because incomes are lagging behind expectations and the prices of many goods and services are continuing to rise faster than incomes. Expenditure on items that are arguably inessential but have become embedded in household budgets seem particularly prone to above-inflation rises. The restraint of council tax increases and the reduction in the basic rate tax-take doesn’t seem to be making people feel better-off either. For many people things are still getting worse as social paymentsare reined in and property rentals rise [or the space available for the same outlay shrinks]. More people in work and fewer people unemployed [still four years to go before we get down to 7%], and a slightly-faster-than-forecast growth in output, might boost confidence and create a sense of well-being for those benefitting, but economic impacts are rarely distributed equitably and the expectations of a particular standard of living remain elusive since a general sense of insecurity and distrust of government and commerce are the prevailing sentiments. A recent report showed how personal savings have been massively depleted over the last few years and people will not feel good until they have been able to restore their usual level of financial security. In my view the squeeze will persist for a few more years yet.

We, as a country, got ourselves into an economic problem, partly due to government profligacy, partly due to our habit of living with high personal debt, and precipitated by incompetent international banking. Inevitably our living standards suffered – the debt has to be reduced to manageable levels. Whether we call the present policy “austerity” or “prudence” there is a slow recovery that, equally inevitably, will raise living standards. It took a few years for our past to catch up with us, and it will no doubt not be an overnight return to more prosperity. I dread to think where we would be now if we had not taken steps to cut national and local government spending.