Inflation is significantly outpacing earnings growth
UK inflation rose to 2.9 per cent in May, worsening the cost-of-living squeeze.
Earnings figures due to be published tomorrow show basic pay rising by 2.0 per cent — meaning that wage growth is significantly slower than inflation. And while inflation is at a four-year high, earnings are falling faster than at any time in the last three years.
Today’s figures also show that inflation is significantly outstripping the Bank of England’s predictions. In its May report, the Bank predicted that inflation would peak at 2.82 per cent in Q4 of this year — a level that’s already been exceeded.
‘The election showed that working people are struggling,’ commented TUC general secretary Frances O’Grady in response to the figures. ‘And the biggest price rises in four years won’t provide any comfort.’
“Working people are still £20 a week off worse, on average, than they were before the crash – and now rising prices are hammering their pay packets again. The new government must stop the real wage slide. Ministers must focus on delivering better-paid jobs all around the UK.”
Inflation has been steadily climbing since last June, when the Brexit vote caused a sharp drop in the pound and increased the cost of imported goods.Like this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.