Simon Atkinson’s Post

Living standards to take a decade to return to pre-Covid levels as top economist calls for ‘courage’ Australia’s decade of lost living standards won’t be recovered until at least 2030 in what the ­Coalition has described as a “grim reality” of the inflation crisis ­revealed in the government’s most recent updated economic forecasts. Fresh analysis of the government’s mid-year economic and fiscal outlook released in late ­December shows that per-capita living standards won’t recover from pre 2021-22 levels until at least the 2029-30 financial year. With both the Coalition and Labor pitted in a pre-election contest over economic management, Jim Chalmers last week called for optimism that the worst of the crisis was behind the nation. Leading Economist, Mr Richardson agreed that the road back to a recovery in living standards from the current inflation problem would be a long one. “It’s a grind, there is no magic wand,” Mr Richardson said. “We are now starting to turn in the right direction but it will be slow, and the pace will disappointing. Mr Richardson said Australia had had “two decades where we had a free ride on the back of the rise of China” “But China is ­becoming increasingly a problem,” he said. “In other words we can’t slipstream somewhere else for our living standards to go up. We need to become more productive; that’s what will return our living standards. He said that, by the government’s own admission, by June living standards would still remain 7 per cent behind where they were when Labor came to power in May 2022. Previous analysis of official government statistics, revealed by The Australian last year showed that the current cost-of living crisis had hit households twice as hard as the 1990-91 and 1982-83 recessions and significantly more sharply than any ­period dating back to 1959. It also revealed that living standards in Australia during the current inflation crisis had fallen more sharply than in any other OECD country, with the hit to Australian households now worse than almost all comparable developed nations.

The cost of living crisis continues to grip consumers in Ireland despite easing inflation. The Ipsos Cost of Living Monitor is a 32-country study (including Ireland) looking at how people are doing financially and their expectations for the future. In its sixth edition, it uncovers that despite inflation rates slowing in many countries the number of people struggling financially remains high. Some key findings 💡 While the “Global Economy” is seen as the biggest driver of rising prices in Ireland, (81%), 72% blame the policies of the government, with the same proportion placing the blame on businesses making excessive profits. Globally, 20 countries have seen an increase in the proportion saying their government is making inflation worse compared to November 2023. 💡 Almost half (47%) in Ireland think inflation is higher now than it was at the start of the year (18% believe it’s falling). Almost 3 out of 5 people (58%) think inflation is going to increase further over the next 12 months. https://lnkd.in/eQjhEKQt #IpsosSurvey #Insights #Economy #Inflation #GlobalEconomy #BeSure #DelveDeeper Kieran O'Leary

Following the first Labour budget for 14 years, consumer confidence in the UK economy has reached the lowest level recorded in RED C Research’s UK Consumer Mood Monitor. A noticeable difference from a year ago is that consumers are now concerned about every aspect of the economy. A year ago, concerns were primarily to do with inflation and the cost of living. Age is an important factor in how consumers reacted to this budget. Older consumers, particularly those aged 65 and older, were significantly more likely to feel things were getting worse. Spending on household energy is expected to increase significantly over the next six months, at levels close to a year ago. Find out more: https://lnkd.in/ekK6n7bD

While the #usa is still considered a rich, modern and efficient economy based on per capita GDP, the picture changes with a wider perspective on economic, social and environmental standards. According to a new study #germany not only outperforms the US but reaches overwhelming superiority in many categories. #comparison

It is evident that the current mood in the UK reflects a sense of melancholy, according to the Office for National Statistics' (ONS) report, "Measuring progress, well-being and beyond GDP in the UK: May 2024". The ONS has shifted the focus from Gross Domestic Product (GDP) to better gauge the country's well-being. This shift acknowledges that GDP alone fails to capture the complexity of life in Britain, including factors like overall wellbeing and lifestyle. Economic inactivity among adults aged 16 to 64 has risen sharply, reaching 9.4 million in early 2024, largely due to long-term sickness. In addition, financial pressures have intensified with higher inflation affecting 21.8% of the population. Moreover, leisure activities have declined compared to four years ago, while visits to natural spaces remain popular, with 68.4% of adults in England enjoying green areas. However, fewer individuals reported health benefits from nature in 2022 than in 2020, attributing this decline to less frequent or shorter visits. The next report on this subject is expected to be published by the ONS on the 14th of August, 2024. https://lnkd.in/diCuShKh #Wellbeing #ONS #OpenDataUK #OpenData #lifestyle

People often say our economy is housing with a few bits tacked on. They go on to say our national obsession with throwing all our money into houses means there is less money left to invest in productive things – like businesses that might actually make some real shit happen! Well, here is some recent research from the UK context that validates these comments. The research demonstrates that paying too much for houses is a significant drag on economic productivity and real incomes. The research found that a 1% increase in the house price to wage ratio resulted in a 0.14% reduction in economic productivity. I know it's dangerous to apply research in a linear fashion elsewhere, but I will do it anyway. If this research was applied directly to New Zealand, it would mean that the 48% lift in the house price to average annual wage ratio we saw over the decade to 2023 would have led to a 6.7% reduction in New Zealand’s productivity. A 6.7% extra boost to productivity is huge – it would have doubled the mediocre productivity growth we saw over the decade (7.3% total) and seen New Zealand’s GDP per fill job reach $146,300 instead of the $137,200 of GDP we actually generated from each job in 2023.

According to the Labour Market Overview, UK: April 2024 bulletin, 74.5% of adults aged 16 to 64 were in employment in the three months to February 2024. This has decreased since this time last year when in the same period, 22.2% of adults were economically inactive in the UK. Why is economic inactivity increasing? In the ONS latest Labour Force Survey data, the majority of those who reported being inactive said they did not want a job (81.9%), which could be for a variety of reasons, such as being a student, long-term sickness or looking after family or home. The most common response in the three months to February 2024 was long-term sickness, which remains at historically high levels. The ONS found that increases in the inactivity rate were mainly caused by both our ageing population and increasing prevalence of work-limiting health conditions. However, the effect of the rise in work-limiting health conditions was larger than that of population ageing. Across all people in Great Britain the ONS report a long-term decrease in the percentage of people self-reporting "good" or "very good" health (Opinions and lifestyle survey data, 2024). How are organisations supporting people with their health and wellbeing? To what extent are we creating purposeful jobs, supporting our staff to be active, to have autonomy over the work that we undertake, promoting active work, offering flexible work that accommodates diverse needs and utilising the benefits of nature and outdoor spaces? Taking a strategic approach to staff wellbeing is key to business success.

Our 'Quarterly Economic Commentary, Autumn 2024', published today, found that the inflation rates continue to decline 📉 Electricity and gas—previously the largest contributors to inflation— are now experiencing negative price growth 📈This trend, along with rising nominal wages, is contributing to ongoing real wage growth. We expect Consumer Price Index inflation to rise by 2.3% in 2024 and just 1.2% in 2025 👨💼The Irish labour market remains robust, with the unemployment rate projected to approach 4% over the next year 🧳 This is especially noteworthy given the significant population growth underway. In this context, it is crucial to recognise the role of net inward migration in Ireland's ongoing economic success 💡 Read more key findings: https://lnkd.in/e8wyGSKm

The household saving rate has been rising since late 2022 and remains several percentage points above pre-pandemic levels. On top of all the other headwinds Europe is facing, this shock to saving preferences is quite substantial. It depresses consumption and therefore is a negative for the growth and hiring outlook in the short-run. Europe's economy would perform better if European consumers were behaving a little more "American" right now. #housholds #savingrate #consumption #economy #spending

Government Spending and Regulation Blamed for Rising Living Costs in Australia https://lnkd.in/gFvRGeMF , Government policies under scrutiny in Australia’s cost-of-living debate As Australians continue to grapple with rising living costs, some economists are questioning whether government policies are exacerbating the situation. Increased public spending and regulatory constraints, they argue, may be adding to inflationary pressures by influencing business costs, competition, and productivity. While some regulations