Thursday, September 20, 2018

Wages continue to stagnate

The Office for National Statistics said the consumer price index (CPI) jumped to 2.7% last month from 2.5% in July, confounding economists’ forecasts for the rate to fall to 2.4%.
The surprise increase will prove unwelcome for hard-pressed British households, which had finally begun to see wages rising above inflation earlier this year. Although workers’ annual pay rises have gradually begun increasing, they remain perilously close to inflation.
Frances O’Grady, the general secretary of the TUC, said: “The pay squeeze is tightening again but the government is doing nothing to get wages rising faster.”
The latest labour market figures, which lag inflation data by a month, showed total pay including bonuses rose by 2.9% in the three months to July. Regular pay growth was 2.6%, suggesting real wages could be falling for many workers in Britain.
Mike Jakeman, a senior economist at PwC, said: “A faster rate of inflation is likely to reduce the narrow gap between wages and inflation further, meaning that the rise in living standards for workers is likely to have been only marginal.”

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