Average pay drops as inflation soars
- Author: Zachary Reyes Jun 14, 2017,
Jun 14, 2017, 18:13
TUC general secretary Frances O'Grady said continued slow wage growth could put the country "in the middle of another cost of living crisis".
Data released yesterday (13 June) by the ONS showed inflation rose at the fastest pace since June 2013 in May, climbing to 2.9% and exceeding the forecast the Bank of England issued last month, when it indicated it expected inflation would peak at 2.8% this autumn.
Ben Brettell, senior economist at Hargreaves Lansdown, said that while unemployment remains at a multi-decade low of 4.6%, the squeeze on household finances is worse than previously thought.
This represents the biggest real wages decline since August 2014.
Samuel Tombs, chief United Kingdom economist at Pantheon Macroeconomics, says today's figures are reminiscent of 2011/2012 when inflation surged but wage growth weakened.
The number of temporary employees fell by 2.8% to a total of 1.58 million in the three-month period from February 2017 to April 2017 when compared to the same period a year ago, according to seasonally adjusted figures by the Office for National Statistics (ONS).
Excluding bonuses, nominal wages rose by just 1.7 per cent in April, versus expectations of a 2 per cent increase.
"Ending the public sector pay pinch and enforcing a real living wage must be the first step to lifting millions of working people out of poverty".
Real wages are falling at the fastest pace for three years as the pressure of rapidly rising prices threatens to squeeze Britons' ability to keep up the spending which has fuelled recent resilient economic growth.
"Ministers must focus on delivering better-paid jobs across the UK". For instance, quarterly data last month showed that underemployment-the proportion of workers who want to increase their hours and are able to do so within two weeks-had edged up to 8.4 per cent in Q1 and well above its pre-crisis low of 6.2 per cent. "In the longer term, we must fix the foundations of our economy by improving productivity growth through meaningful progress on a modern industrial strategy, with real change on the ground in skills, infrastructure and innovation", Carberry said.
The inflation rate in Britain has risen to its highest level in four years, hitting 2.9 percent in May from 2.7 percent in April.
The work and pensions secretary, David Gauke, highlighted the jobs figures.