Warning over real terms wages fall


Published: Thursday 16th October 2014 by The News Editor

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Average wages have fallen in real terms by £50 a week since 2008, according to a new study.

Research by the TUC said average weekly earnings have been falling for seven years in a row, the longest stretch since records began in the 1850s.

The report follows official data from the Office for National Statistics yesterday, which showed that average annual pay growth has improved slightly but is still well below inflation at 0.7%.

Figures covering June to August showed a slight improvement on 0.6% recorded a month before but extends the real terms squeeze on wages – with a steep fall in bonuses at the bailed-out banks keeping the number down.

It gives the Bank of England further scope to delay any rise in interest rates, with expectations for the first hike already pushed back well into next year with inflation at a five-year low of 1.2% and fears over the global economic climate.

Earnings have not been consistently improving at a higher rate than inflation since 2008, though they briefly edged ahead earlier this year.

TUC general secretary Frances O’Grady said: “Workers would be over £2,500 a year better off had wage growth kept pace with even the most modest measure of inflation.

“Instead, pay has fallen off a cliff and shows little sign of recovering any time soon. Ordinary households are not sharing in the recovery and are facing their seventh consecutive year of real wage cuts.

“People are increasingly being forced to use their credit cards and dwindling savings to make ends meet, and unless Britain gets a pay rise soon the UK’s personal debt problem will get even worse.

“That’s why thousands and thousands of people from across the country – who work in both the private and the public sectors – will be coming to London on Saturday for our Britain Needs a Pay Rise march and rally.”

Published: Thursday 16th October 2014 by The News Editor

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