Pocket money
Last month the Halifax summed up its survey of pocket money by saying: "a collective yearly spending of £70m… means the average amount children receive is £7.82 per week." The £70m a year figure was duly headlined in the Independent. But nobody noticed that £7.82 a week means that there are just 175,000 children in the country, instead of the actual 9.14m. Of course, what was meant was £70m a week.
Beyond our means
As personal debt soars beyond the £1 trillion mark, the prospect of a gentle end to Britain's spending spree on houses and in the shops declines. £800bn is now owed on mortgages and over £200bn on credit cards and other unsecured borrowing. With at least one further increase in interest rates likely by the end of the year—and assuming no more in 2005—consumers will be paying around 40 per cent more for their borrowing next year. Allowing for this year's growth in debt, that means interest will take up to an extra £18bn next year, even if there is no further increase in debt in 2005, when the cost will reach about £63bn.
Add in the amounts taken out of income to repay capital, and increased costs for basic things like fuel and water, and there will be little left out of higher after-tax incomes (up by perhaps £25bn) to funnel into higher spending on goods and services.
Meanwhile, rising house prices, which have been fuelling the boom, are said to be slowing; the rate of increase is down from 20 to 18 per cent. Wait a minute. You are driving at 60mph and accelerate by 20 per cent—to 72mph. Your passenger says slow down. So you increase your speed by only 18 per cent. You are now travelling at 85mph. Slowing up or slowing down?
