Wednesday, July 19, 2017

Rebalance in UK

Bank Underground:
The depreciation of sterling since late 2015 has raised import prices, and those higher import prices are now being passed into higher consumer prices.  When combined with stagnant wage growth that implies that households are likely to see their real incomes stall and not grow at all over the next year, whereas they have been increasing at an annual rate of around 2% over the past few years.
They will be hit with interest charges if they increase debt. Consumers will consume less and the UK faces lower growth for a while.

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