Matthew Lynn Matthew Lynn

Payday: who’s afraid of rising wages?

During the Brexit referendum, Stuart Rose, the former boss of Marks & Spencer, and chair of the Remain campaign, claimed that if Britain left the EU, wages ‘will go up’. This was, he added, in a rare moment of candour, ‘not necessarily a good thing’.

But the idea that salaries might rise was exactly the reason that a great many people voted for Brexit. They were well aware that it suits the likes of Lord Rose to keep wages low, and they resented it.

It is now nine months since Brexit’s transitional arrangements came to an end, completing the UK’s break with Brussels and Stuart Rose’s prediction has come true — spectacularly so. Wages are rising at the fastest rate in decades. Last week, Costa coffee raised the pay of its staff by 5 per cent, which in the current climate may not be enough to keep many of them. Wincanton, the country’s largest road haulage firm, said it was raising the pay of some drivers by 30 per cent. Amazon is offering a £1,000 signing on bonus for anyone starting at one of its warehouses, as is Pets At Home, the UK’s largest pet store. Golden hellos are not just for the City anymore.

Brexit and furlough are just jigsaw pieces in a bigger picture. Labour shortages are a global trend

The desperation from employers is becoming obvious. Critical labour shortages have led to empty shelves and closed restaurants. The shortage of HGV drivers is the clearest example of the crisis, but there are millions of businesses that are struggling with just one or two jobs unfilled. Even a single vacancy can mean that other staff must work overtime, and owners must sometimes step in to fill gaps. On Tuesday, the Office for National Statistics reported that vacancies have risen above a million, the highest figure on record.

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Matthew Lynn
Written by
Matthew Lynn
Matthew Lynn is a financial columnist and author of ‘Bust: Greece, The Euro and The Sovereign Debt Crisis’ and ‘The Long Depression: The Slump of 2008 to 2031’

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