Britain's workforce faces another year without a pay rise in 2018

  • Britain’s workforce faces another year without a pay rise.
  • The Resolution Foundation expects zero growth in real wages over the course of 2018, as wage growth rises in line with inflation.
  • That is an improvement on 2017 when pay growth was outstripped by rampant inflation caused by the fall in the pound after the Brexit vote.
  • But it means a “noticeable” year-on-year rise in real pay is not now forecast until December 2018.

LONDON – Britain’s workforce faces another year without a pay rise, according to the Resolution Foundation.

In a new report, the influential policy group said it expects zero growth in real wages over the course of 2018, as wage growth rises in line with inflation.

That is an improvement on 2017 when pay growth was outstripped by rampant inflation caused by the fall in the pound after the Brexit vote. But it means a “noticeable” year-on-year rise in real pay is not now forecast until December 2018.

Real pay remains £15-a-week below its peak before the financial crash of 2008, and is not predicted to recover to pre-crisis levels until at least 2025.

Resolution Foundation director Torsten Bell said 2017 was “a tough year for living standards as the pay squeeze returned.”

“The good news is that things will get better next year.

“The bad news is we may only go from backwards to standing still, with prospects for a meaningful pay recovery still out of sight.

“While the public have famously defied recent gloomy economic predictions and continued to spend, public expectations do appear to be moving in line with experts’ pessimistic predictions.

“This pessimism is strongest among those on lower incomes, unsurprisingly given big benefit cuts set to take place.”

In response to the Resolution Foundation’s report, a Treasury spokesman said: “We are helping families to earn more and keep more of what they earn. Our national living wage is delivering the fastest pay rise for the lowest earners in 20 years and we are cutting taxes for millions of people.”

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