First real wage rise predicted since 2007
23 Feb 2015
Economic forecaster the EY ITEM Club has released a report showing that UK workers are likely to see an overall increase in real wages of 1.8% this year.
GDP growth is also expected to improve, with predictions revised from 2.4% to 2.9%, continuing into 2016. Cheaper oil has been cited as a major boon for businesses that may see cheaper transport costs and also petrochemical product prices lowering. Inflation measured by the Consumer Price Index (CPI) has been predicted to average zero this year and temporarily reach negative figures in the spring.
The likelihood of improved wages has led many to consider how consumers are likely to spend their money. Ed Hudson of the EY ITEM Club referenced their Special Report on Consumer Spending, saying: ‘The expectation in that report was that the prospective winners from the relatively gradual increase in discretionary spending would be hotels, restaurants and consumer technology including smartphones’.
He added: ‘Overall, the latest forecast is encouraging news for consumer, retailers and consumer goods producers. They’ve all had a rough ride in recent years now it’s time for some payback’.