Three charts that show the UK's decline

Data released by the ONS today illustrates the relative decline of the UK's performance.

Incomes

In international comparisons of household income the UK has dropped from 5th place in 2005 to 12th place in 2011. This is partly as a result of the devaluation of sterling seen in this period.

(ONS)

(Source: ONS, OECD)

The ONS notes that high inflation affects of well-being through the erosion of household incomes:

As prices rise faster than people’s incomes, over time people find their income purchases a lower quantity of goods and services - therefore they feel worse off.

In addition to the impact on household income, a high rate of inflation reduces the real value of wealth held in cash terms - the higher the rate of inflation the greater the reduction in the real value of wealth held in cash.

(ONS)

Inflation has remained above the Bank of England's target rate of two per cent for 40 consecutive months. Squeezing incomes while the Bank of England has held interest rates for 50.

Unemployment

For unemployment the UK fares little better. A comparison of harmonised unemployment rates:

(Source: ONS, OECD) Think tank the Adam Smith Institute:

Unemployment is far above the natural rate at 7.9 per cent, and though real wages have declined, driven by 40 successive months of above-target inflation, clearly pay hasn't fallen far enough to clear the labour market. The personal, social and economic costs of the misaligned prices that allow this to happen are unconscionable.

Public Debt

Meanwhile, the coalition has been unsuccessful at getting public finances into order, as gross public debt as a percentage of a GDP continues to converge towards that of the Euro area:

(Source: ONS, OECD)