UK workers facing worst wage squeeze 'since Napoleonic wars'
Real wages not expected to return to pre-crisis levels until 2022, warns IFS
Workers in the UK are experiencing the worst period for wage growth since the Napoleonic wars, with the financial crash continuing to cast its shadow over the economy.
While employment is at record levels, wage growth flatlined over the past decade and average earnings are not expected to return to their pre-crash levels until 2022, says the Institute for Fiscal Studies (IFS).
In his Budget this week, Philip Hammond claimed wages for the lowest-paid grew faster last year than in any of the past 20 years, partly as a result of the introduction of the national living wage for over 25s.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
However, analysis of the latest forecasts from the Office for Budget Responsibility, on which the Chancellor bases his policies, shows real pay is expected to start falling in the second half of next year as rising prices outstrip increases in wages.
The IFS said the past decade of weak productivity and flatlining real wages has been "unprecedented" in modern times, says The Guardian.
In addition the OBR's figures show government borrowing remains stubbornly high, which will mean a "third parliament of austerity".
Think-tank Resolution Foundation said weak pay growth combined with more than £12bn of benefit cuts means that for the poorest third of households, this parliament is "set to be worse than the years following the financial crisis".
With real average income growth set to fall to 0.2 per cent by 2020, the years from 2011 to 2020 will be the worst decade for pay growth for 210 years "since the Napoleonic wars", it added.
Create an account with the same email registered to your subscription to unlock access.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
Brits keeping 21 million ‘money secrets’ from friends and family, survey reveals
Speed Read Four in ten people admit staying quiet or telling fibs about debts or savings
By Joe Evans Last updated
-
London renters swap cramped flats for space in suburbia
Speed Read New figures show tenants are leaving Britain's cities and looking to upsize
By The Week Staff Published
-
Should the mortgage holiday scheme have been extended?
Speed Read Banks warn that some homeowners may struggle to repay additional debt
By The Week Staff Last updated
-
RBS offers coronavirus mortgage holidays
Speed Read Taxpayer-owned bank follows measures taken in virus-struck Italy
By The Week Staff Last updated
-
What are the changes to National Savings payouts?
Speed Read National Savings & Investments cuts dividends and prizes for bonds
By The Week Staff Published
-
China clears path to new digital currency
Speed Read Unlike other cryptocurrencies, Beijing’s would increase central control of the financial system
By Elliott Goat Last updated
-
Why are donations surging to the RNLI?
Speed Read Charity enjoys flood of funding after criticism for overseas work
By The Week Staff Last updated
-
PPI deadline day: how to claim
Speed Read Final chance for consumers to apply for compensation
By The Week Staff Published