22 August, 2013

The strange death of the British middle class � The Spectator

The strange death of the British middle class � The Spectator:
This trend seems set to continue. George Osborne’s so-called recovery is being driven by the incomes of the wealthy. For the best-paid 1 per cent, the boom years never stopped. They now collect 14 per cent of all the money paid in salaries in Britain, a record high. Meanwhile the average earner has taken a real-terms pay cut of about 10 per cent since the crash — and this is not expected to improve. Government figures suggest it will take until 2020 for the average salary to get back to where it was in 2010. The middle class is suffering what Sir Mervyn (now Lord) King described as the longest squeeze in living memory. But for the richest, these are the best of times.

It’s is no accident. Mark Carney, the new Bank of England governor, has said he’ll continue with the policy of quantitative easing, which explicitly aims to revive the economy by inflating the value of assets. Most valuable assets are, of course, owned by the wealthy — especially by the London establishment. While houses in Northern Ireland are still worth less than half what they were at the time of the crash, the value of property in the capital soars higher and higher. By some estimates, house prices in Westminster have risen by an extraordinary 70 per cent since the crash. For MPs who own homes near the Commons, it’s a bonanza.