Real Wages to surpass inflation this month
paulschapman
Posts: 35,536 Forum Member
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http://www.bbc.co.uk/news/business-27010326
Wages are set to rise by more than inflation for the first time in almost six years, says an economic forecaster.
EY says a "long period of low inflation" means average earnings could rise faster than the cost of living as early as this month.
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Its latest report reads: "We expect wage growth to overtake CPI inflation as early as April."
"Until now the recovery has been financed by a fall in the amount households save, but it appears to be moving to a firmer footing," said Peter Spencer, the club's chief economic advisor.
"The consumer upturn will be given a boost from real wages and rising employment, while investment is finally kicking in."
Falling petrol, energy and food prices, driven low by a strong pound, will help keep the cost of living down for a sustained period, Mr Spencer added.
"We are set for a long period of low inflation as pressures from commodity prices... remain largely absent."
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Meanwhile, the growing demand for labour should push up wages and could also see the UK overtake Germany as the country with the highest employment in the G7 group of leading economies, the group claims.
It predicts the UK unemployment rate, currently at 7.2%, will fall to 6.5% by the end of the year and 6% by the end of 2015.
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Comments
It's all good.
One month out of 48 - that's good going.
Will it apply to all minimum wage workers as well ?
it doesn't take long for a cloud to come along to spoil the silver lining.:D
are you not glad the economy and wages are moving in the right direction after the worst financial crash for about 70 years?
well done to the coalition. long may they keep labour out of number 10 (and 11).
How do you know that wages would not have gone up sooner if Labour had been in number 10 (and 11) ?
BTW I'm not claiming they would have I'm just asking how you know that they wouldn't.
less sarcasm.;-)
i don't - and no-one can answer that for certain.
however, wasn't it darling who said if they stayed in power, labours cuts would have been worse than anything thatcher ever did? so i doubt wages would have gone up sooner if labour stayed in office, especially with ed balls in number 11.
btw, in answer to your question about people on minimum wage, yes they do benefit:
http://www.bbc.co.uk/news/business-26543267
Exactly !!
That is good to hear
Will workers on the MW be getting a wage that means they won't need to claim benefits to top up their wages ?
So, that's me straight down to the showroom to put a deposit down on a new Bentley... or maybe not.
Not yet, but given that only the top 20% of earners are actually net contributors - the number of people who claim benefits would be fairly high up the wages scales.
glad you agree with me in regards to labour.:)
you'd better ask their employers that question, and not me.
out of touch, man in the street, bankers bonuses.
I knew I'd intended to bold something
I was actually agreeing to this.
I'm not able to do that as I don't know anyone on the minimum wage other than my husband and he doesn't claim benefits.
The average persons wages, which they have to pay housing costs out of, have not gone up in any significant way.
It's a badgers situation. ;-)
People are really tired of austerity winter, and it's the Conservatives who are blamed.
People don't vote using logic. There is a very real sense of 1996 all over again. Corruption, hypocrisy, sex-scandals...
i think there is a legitimate possibility of that.
basically people thinking the economy is fixed so we no longer need a conservative government.
but if that is the plan labour would have to stop talking down the economy. the conservative line is that the job is not done yet.
Meanwhile back in the real world..........
Well, it certainly won't apply to public sector workers.
This makes no sense whatsoever!
Good point.
'Twas only a few years ago that inflation was measured by RPI - which is currently running at 2.7%.
Some have short memories.
That's unfair, public sector workers are just as hard working, and in some cases even more hardworking as private sector workers.
But this Government has never appreciated public sector workers so it's not really surprising.
Mr Osborne will follow the traditional political custom.
Tax rises at the beginning of the parliament
During the course of this parliament, borrows even more money - in this case £700 billion
Caps rises in working age benefits
Yet, will able to find money for tax cuts just before the general election.
But will the proposed tax cut prior to next general election boost the Conservatives current 308 seats ?