For the middle classes, things can only get worse

In this week’s magazine Fraser Nelson and I look at the breaking of the English middle class, a subject so scary you’ll want to hold someone’s hand when reading it. The frightening thing is that in Britain, as in the United States, the middle class is not just squeezed but shrinking and sinking.

Even before the Great Recession began, middle-class jobs in the law, media and accounting have been melting away, outsourced, unprofitable or obsolete, while salaries are falling behind prices. This is not a product of the credit crunch, and it will not be going away.

Median hourly income in London is now below 2002 levels, real wages in Britain have not risen since 2005, and the median income has been static or in decline since 2004. The savings rate, a sure mark of middle-class respectability, has plummeted, while pensions are depleted.

Meanwhile house prices have increased 500 per cent in the past 25 years, so that the average London property is almost 20 times the average national income.