UK confronts highest real wages decline in century
(MENAFN) The biggest drop in real wages in a century could occur later this year in Britain as pay rises lag inflation by almost 8%, according to a report released on Thursday by the Trades Union Congress (TUC).
Living standards in the nation are anticipated to decline by an unprecedented 7.75% as a result of the central bank's forecast that inflation would reach 13% in the fourth quarter of 2022 while wages would only rise by 5.25%.
Since the 1920s, workers' wages had not experienced such a severe and prolonged decline in relation to inflation, according to the TUC. The union congress warned that the situation was a "real pay disaster" rather than a wage-price spiral.
Inflation is predicted to be subdued through the winter and fall, staying at around 5.25%, and pay increases will only account for 20% of that.
The research revealed that the combination of pay increases that were roughly 1% above the 4% pre-Covid pandemic level and double-digit inflation resulted in "the largest decline in exactly a century."
“Real pay has fallen by more on only one occasion, a decline of 13.3% in the fourth quarter of 1922 – as the post first world war pay and price inflation went sharply into reverse. The only other comparable figure was 7.2% in the first quarter of 1940,” the TUC stated.
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