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UK household incomes drop

Household incomes drop for the first time in 30 years.

According to the Office for National Statistics, real disposable income fell by around 0.8 per cent in 2010 - equivalent to a per person drop from £14 181 in 2009 to £13 980 last year.

Rising inflation and static wages are largely being blamed for the drop in disposable income as the tetchy economy is putting off employers from increasing wages to match inflation, which itself is being propelled by high oil prices.

It is expected that this year will see another fall in real disposable incomes, with the increase in National Insurance coming into effect in April, and the job market becoming more uncertain. As a result, Pricewaterhouse Coopers predicted a 1.2 per cent fall in disposable income on average per household for 2011.

Liam McLaughlin is a freelance journalist who has also written for Prospect and the Huffington Post. He tweets irregularly @LiamMc108.