‘Many have pointed to wage growth as the ‘missing piece of the puzzle’. While there are more people employed in this country than ever before, the problem is that our wages are increasing at a glacial pace. That’s why we need our savings and investments to work even harder – rising inflation coupled with lower-for-longer interest rates, means savers are losing out in the long term if they’re leaving their money languishing in cash. This matters massively, as workers wait for that elusive pay rise.’
Meanwhile, Ian Kernohan, economist at Royal London Asset Management, said: ‘With inflation now above target, real earnings growth has slipped into negative territory. The Bank of England’s [rate-setting] MPC will need to see a distinct improvement in earnings growth, if their latest forecasts are to prove accurate.’
In other earnings news, the Institute for Fiscal Studies says that earnings growth will return but, put simply, any growth is nothing to get excited about.
Dennis de Jong, managing director at UFX.com, commented: ‘Alarm bells will be ringing for Britons with wages continuing to fall. This could cause a headache for the government over the standard of living in post-Brexit Britain in the run up to next month’s general election.
‘Despite economic officials remaining hopeful about the UK earnings forecast for the remainder of the year and 2018, the Prime Minister will have questions to answer if the slump in wages continues.’ Helen Nugent is Online Money Editor of The Spectator
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