Real wage growth expected to have improved
15 Jun 2015
Independent think-tank the Resolution Foundation will on Wednesday publish figures expected to show that real wages in the UK have grown at the fastest rate since 2007.
In their analysis of average weekly earnings growth, the think-tank is predicting an annual growth rate of between 2.5% and 2.6% between February and April this year. Actual wage growth between January and March was 2.2%.
The fall of inflation to -0.1% in April means that overall wage growth would be the fastest since the financial crisis.
But Chief Economist at the Resolution Foundation, Matthew Whittaker, added: ‘The good news is that real wages are now – finally – growing at a respectable rate by historical standards. The bad news is that this only appears to be happening because of inflation falling to unprecedented levels.
‘Normally we’d have expected wages to grow at this rate far earlier on in a recovery, so there is an enormous amount of ground to make up. We need to see real wage growth sustained at this rate year on year.’
The Resolution Foundation also added that average weekly earnings are still lower than a decade ago. If the financial crisis had not happened the Foundation predicts average weekly income would have been £100 higher.