Will Household Owners Benefit From New Economic Plans?

25 June 2012 14:00 - Phoebe Robinson

Will Household Owners Benefit From New Economic Plans? 

New reports are revealing that homeowners will be 700 euro better off. The New Idea to reduce mortgage interest rates is expected to result in a 2.4% rise in the amount of income householders have by the end of 2012.

Despite this it does not look as hopeful for everyone. A study from the Irish Business and Employers Confederation (IBEC) showed that while mortgage holders will witness their spending power increase, other groups could end up worse off. It has been said that the government needs to consider all consumers and their differing circumstances whilst trying to revive the economy.

"A significant number will see their spending power increase this year, due to falling interest rates, modest pay rises and the absence of significant additional taxation, “said the IBEC chief economist Fergal O’Brien. 

The European Central Bank is expected to reduce its rate by a further 0.5% in coming months, this is sure to have a positive effect on householders. The Irish Consumer Monitor report from IBEC, an organisation that represents Irish Business, found non-mortgage holders could see their discretionary income drop between 0.8% and 3.7%.  

O’Brien pointed out that the problems in the eurozone continue to worry consumers which will prevent them from spending a lot and therefore thwart the economy from growth. He feels that new thinking and ambition is what is needed for the economy to grow.

Also brought to light was the fact that the main cause of the unemployment crisis is a lack of consumer confidence and low domestic demand."Getting people back to work is the priority, but to do this we need a return to more normal, sustainable consumer spending levels," Mr O'Brien declared.