There are lots of explanations for that. Perhaps productivity increases have ground to a halt. High levels of immigration might be creating too much competition for the jobs that are available. Possibly globalisation has started to drive down wages everywhere.
Whatever the reason might be, there can be little doubt that living standards are under pressure. And yet, if you look more closely, in some areas something very interesting is happening. We are all getting richer in a few areas of our lives, if not in others. The most obviously example is food. The latest inflation figures showed that food price inflation is currently running at -1.1pc – that is, prices are going down. Wages, according to the Bank of England, are currently increasing by 0.7pc. So, although your pay packet it only a little bigger than last year, the cost of a supermarket shop is a bit less. In real terms, therefore, you are better off – by close on 2pc over the year.
The price of petrol also went down, with an average price of £1.29 per litre in August this year, compared with £1.37 last summer. So, when it comes to filling up your car, you are also richer than you used to be.
Against that, lots of prices went up. Housing was the most obvious culprit, followed by water and electricity, then transport and clothing. The net result was an inflation rate of 1.5pc.
It is not hard for anyone to work out why some stuff has been getting cheaper and other things more expensive. The grocery industry has been plunged into a savage price war. The big supermarkets have always competed on price but, even at the height of its market dominance, Tesco had margins of 6pc, far higher than its American rival Wal-Mart or France’s Carrefour. Given that Tesco accounted for more than 10pc of retail spending, that additional margin was by itself adding significantly to the cost of living.
With the arrival of Aldi and Lidl all that has changed. Their model of selling lots of basic stuff at brutally low prices, and accepting wafer thin margins, has been a big success.
Rather like easyJet and Ryanair in the airline industry, they have focused simply on what customers want and provide it at far lower cost than their rivals. It is a winning formula and one that has their bigger rivals in trouble. The net result? Food prices are now going down.
The story in petrol is not so different. The oil price has been falling and that helps but the supermarkets have been cutting their prices to tempt customers away from their rivals.
Once again, competition is pushing down prices, and raising living standards.
There is a lesson in that. The Labour Party has proposed price controls on energy companies, creating new challenger banks and has started to toy with ideas such as rent controls. But food is one of the largest expenses for most ordinary people and what that sector really shows is that what works is competition.
A decade ago, discounters didn’t have the space to mount a serious challenge to the big four supermarkets but, as the planners have allowed them to open up lots of medium-sized stores, they have flourished and the existing players have been forced to react.
The same thing happened in airlines. It was only when the budget carriers were allowed to offer lots of flights from peripheral airports such as Luton or Southampton that the big airlines had to lower their prices.
More competition is needed in plenty of other industries. The property market is soaring out of control because not nearly enough new homes are being built, especially for a country with very high levels of immigration.
Allow more land to be developed and new players to experiment with different forms of ownership and the cost of buying or renting a place to live will eventually start to fall.
In the same way, sectors such as energy need to be freed from restrictions that prevent new resources such as shale gas from being developed as fast as they should be.
The banks provide notoriously poor value for money but, once again, the fix is surely to relax regulations, so that new institutions can emerge with better and cheaper ways of doing business.
In leisure, the cost of a cinema ticket has risen by an extraordinary 26pc over the past five years, according to the British Film Institute. If planners allowed more cinemas, that would surely come down. The same is true in sectors such as insurance and transport.
The debate about living standards is mostly about lifting wages but reducing prices is just as effective a way to achieve the same end – and the best way to do that is to allow new players into the market. In fact, anyone who is genuinely worried about living standards should be raising a glass of the finest Bulgarian merlot to Aldi and Lidl – they are doing far more to raise living standards right now than any politician or central banker.

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