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From The Socialist newspaper, 31 March 2009

Poor hit by price rises

SURPRISING ALL the pundits, inflation went both up and down last month - that is to say, up for the poor and down for the rich.

The Retail Price Index (RPI) fell to zero for the first time in nearly half a century. The beneficiaries were mainly those with large mortgages on big houses. Monthly average mortgage payments have fallen by more than 240. In London, where house prices are more expensive, average monthly savings are more than 350.

But hiding behind the averages are vast differences - a mortgage on a house worth several million pounds which adjusts with inflation (such as a base-rate tracker mortgage) will leave the owner thousands of pounds better off. While at the other end of the spectrum people sold houses they can't afford by unscrupulous banks are facing repossession, and tenants of repossessed rented houses are thrown out without a moment's notice, Shelter has revealed.

Consumer Prices Index inflation, on the other hand, rose from 3% to 3.2%, partly as a result of food price rises. This hits poor people the hardest as food is a much larger proportion of their spending. Food prices have risen 11.5% in the year. Vegetables rose nearly 19% and meat by more than 15%. Coffee and tea prices increased by more than 10%.

The decline in house prices accelerated in February 2009, reaching an annual rate of decline of 16.5% (up from 15.1%). House prices are still far too high for first time buyers and mortgage payments for those owning houses will not fall any further.

Wage agreements often follow the RPI, so that the most poorly paid workers are threatened with reduced wage settlements while basic outlays are rising. Is it a surprise that consumer spending is slumping or that the recession is now thought to be worse than previously predicted? Compared to a year ago the economy shrank 2%.

Pete Mason

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The results of austerity have been graphically demonstrated as public services strain to cope with the crisis.

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In The Socialist 31 March 2009:

The G20 leaders have no solution to the crisis...

Fight for a future!

Youth Fight for Jobs conference

Why I'm marching

The grim reality of job-hunting


G20 protests

G20 Summit: Capitalism facing 'make or break'

Free market system killing our planet

UEL clampdown

Bail out workers, not Wall Street!


Socialist Party workplace news

Visteon workers occupy Belfast factory

Construction workers' protests continue

Socialist stands in Aslef leadership elections

College teachers strike in Eastbourne

Unison needs a fighting leadership: Leeds City Council

Whipps Cross Hospital

Unison elections


Socialist Party Marxist analysis

Economic crisis turning into political action


Socialist Party election campaign

No2EU - Yes to Democracy

Dave Nellist on the Politics Show


Socialist Party campaigns

Poor hit by price rises

No to privatised polyclinics

Gordon Brown meets the bankers

Sack the bankers not the workers!

Fast News


International socialist news and analysis

Now that the profits are drying up in the Indian software industry

Sweden: Socialist councillor viciously assaulted by Nazis


 

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Related links:

Inflation:

triangleMerseyside Matalan workers walk out over pay deal

triangleLabour looks to Bank of England to stall house prices

triangleBosses' pay up a fifth while workers' pay falls ...

triangleProfits up Wages down

triangleLeaked pay deal: fight for a genuine pay rise

Food:

triangleTories' obesity plans - blaming individuals not the profit system

triangleNews in brief

trianglePlastic waste ignored

trianglePrivate firm causes weeks of delay to free school meal vouchers: bring it back in-house!

Mortgages:

triangleYoung people being strangled by debts

triangleHousing crisis: Corbyn's positive measures blanked by Labour's right

triangleOver a million families in 'extreme problem debt'

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