The Office for National Statistics showed that net national income per head (NNI) – considered to be the best guide to real living standards – has continued to drop as a result of the squeeze on family budgets from rising prices. The ONS said that NNI per head fell by 13.2% between the first three months of 2008 (when the economy had peaked) and the second quarter of 2012. Over the same period, gross domestic product per head fell by 7%. Even if the data is adjusted to include the welfare state – especially important in Britain with the NHS – it still reveals a bleak picture. This figure, known as real household actual income per head, dropped in the second quarter of 2012 by 2.9% below its peak in the third quarter of 2009.
According to the study, the decline in living standards has been more pronounced and longer lasting than in the UK's two previous recessions in the early 1980s and early 1990s. NNI dropped by around 6% in the slump of the early 1980s, but was back to its pre-recession peak within three years. In the early 1990s, the decline was a more modest 4%, and the lost ground had been recouped in two and a half years.
According to the study, the decline in living standards has been more pronounced and longer lasting than in the UK's two previous recessions in the early 1980s and early 1990s. NNI dropped by around 6% in the slump of the early 1980s, but was back to its pre-recession peak within three years. In the early 1990s, the decline was a more modest 4%, and the lost ground had been recouped in two and a half years.
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