TUC Warns Of 'Lost Decade Of Stagnation'

Britain faces a lost decade of economic "stagnation" because of the current rate of growth, the TUC has warned.

A study by the union organisation showed the UK's rising population has been driving growth in recent years.

It warned GDP income per head is lower now than when the coalition was formed in 2010, and is not set to return to its pre-recession level for five years.

According to its analysis, GDP per head is now £23,728 - just 0.7% higher than the lowest point of the recession in 2009 and 0.7% lower than in 2010.

It is also a massive 7.5% lower than the peak in late 2007 before the financial crisis erupted.

The TUC predicts the pre-recession peak of £25,652 GDP per head will not be reached until early 2018 if the economy continues to grow at the current pace.

It warns there is a risk of another "personal debt bubble" unless real wages and household incomes start rising again.

General secretary Frances O'Grady said: "After years of recession and stagnation, prolonged by painful austerity, the Government has been quick to claim we are back in recovery.

Income per head is lower now than in 2010

"But if the economy continues to grow at its current rate, it will still take nearly five more years to get back to where we were in 2007. That doesn't sound like much of a recovery.

"Too many people are having to run down their savings or turn to credit cards to spend in the shops, rather than see their incomes grow, and behind improving employment figures are millions of workers whose incomes are falling and who can't get enough hours to make ends meet.

"We all want to see the UK economy back on track but any talk of recovery is meaningless unless we get the right kind of growth."

The Treasury insisted the economy was "on the mend", citing recent GDP figures showing 0.7% growth in the second quarter, but admitted there is still a long way to go.

A spokesman said: "The Government has taken continued action to help people who work hard and want to get on.

"Increasing the personal allowance has taken 2.4 million people out of tax altogether and saves a typical taxpayer almost £600,

"Freezing fuel duty has kept prices 13p per litre cheaper than they would otherwise have been and freezing council tax for each year of this Parliament will save a typical household £600."

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