So what did happen in the 1870s?

Shrinking incomes could take us back to the 1870s, according to the economist, Roger Bootle.

He says "I expect real earnings to fall by about 1.5% this year. This will mark the fourth successive year of falling real earnings – the first time that this has occurred since the 1870s."


What was happening 140 years ago?


The 1870s got off to a bad start with the Franco-Prussian War, which left France seriously short of money.


Then there was the Panic of 1873: a crash in Vienna followed by railroad failures and bank runs in the USA.


The UK was beginning its long slow decline, production falling behind the US and Germany.


Prices for grain and cotton plummeted, so there were years of deflation.


But at the same time the Bank of England kept interest rates high.


The whole period of 1870 to 1890 was a time of squeeze, known later as the Long Depression.