Our geography and size means that this "typical worker story" is probably not so applicable, but lots of people are having to take lower paid jobs. The rest is a big story but the highlights :
Negatives
- Most people have had no increase in pay (in numerical terms) for 2-3 years.
- At the same time inflation is 4.2% (or over 5% depending on which measure is used).
- VAT (sales tax) went up to 20% at the start of the year, from 17.5%.
- Domestic energy costs are more of a worry than petrol/diesel - risen 54% in 3-4 years.
- Unemployment is steadying and even falling in some areas, but jobs for people just leaving school or college are hard to get. We are in danger of a generation not getting into steady employment like we had in the 80s.
- Petrol prices have eased slightly to just under $8 a gallon, but we have an average of around 35-40 MPG (imperial) for most passenger cars.
- Public transport is running at capacity in a lot of places, and is very expensive. So transport policy is all stick and no carrot.
- We still manufacture a lot here but not as much as we did - we get our Christmas on a big boat from China like you do
- We even buy things we invented (e.g. trains) from abroad - places like Germany.
Positives :
- Interest rates are low, 0.5 - have been there since 2009
- We won't default.
- We aren't in the Euro
The real problem is the hidden cost - the young people mentioned above for example, or the fact that we have a large portion of our population which is more or less uneducated - like the US has. In the past these people found employment in basic manufacturing, which is no longer there, or the unskilled sector. In the latter case though those jobs have been taken by recent immigrants and temporary visitors from the rest of Europe (I have nothing against these people, they are in a lot of cases more hard working than the average uneducated Brit). Previous governments allowed these people to go onto sick benefits from where they never get back into work and us tax payers end up funding them forever - it got them off the unemployment figures though.
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Oh and the current government only seems to have a policy for cutting spending (which they haven't done despite what they say) and nothing to actually get industry and jobs moving.
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We are still a "smart" country - think of us as a slightly scruffy version of Japan with less good teeth
- and these smarts is what we will have to use to earn our living in the future.