Ruth Lea: A 2011 of squeezed incomes but no double dip

The economy probably grew by a better-than-expected 1¾% last year and it can be expected to grow by a similar magnitude this year. Such is the momentum of recovery a double dip seems most unlikely. But there will be many risks and there are many reasons to be cautious. Consumers' expenditure will probably flag this year. Real incomes are being squeezed by higher taxes and prices inflation running ahead of earnings inflation. Unemployment will also bear down on consumers' spending. The impending public sector losses are estimated to be a relatively modest 40,000 in 2011/12, accordin...