From the TUC

Grim Real Wage Forecasts

20 Mar 2013, by Guest in Economics

The new OBR forecasts show real wages (average weekly earnings minus RPI inflation) falling by a further 0.7% this year and growing by just 0.1% in 2014.

This is is sharp contrast to their initial forecasts of June 2010 as demonstrated by the chart below. Not only were the real wage falls in 2010 and 2011 larger than anticipated but this was supposed to the year real wages finally started to grow, up by 0.5%. Next year the OBR originally thought that real wages would grow by 1.0% – a forecast now reduced to just 0.1%.

Real wage OBR

On the OBR’s initial set of forecasts real wages in 2015 would have been very slightly down on their 2009 level, the latest forecasts suggest that real wages in 2015 will fallen by around 9% since 2009.

The squeeze on living standards look set to continue.

4 Responses to Grim Real Wage Forecasts

  1. George Osborne's budget speech attempts to pull off a trick of the eye – Government Tenders, Government News and Information – Government Online
    Mar 20th 2013, 10:26 pm

    [...] beer is nice, but makes little dent when wages are falling in real terms, by 9% since 2009 on one estimate. Nor does cheaper petrol much help public sector workers now facing a below-inflation pay freeze [...]

  2. Techno Vision – George Osborne’s budget speech attempts to pull off a trick of the eye
    Mar 20th 2013, 11:07 pm

    [...] beer is nice, but makes little dent when wages are falling in real terms, by 9% since 2009 on one estimate. Nor does cheaper petrol much help public sector workers now facing a below-inflation pay freeze [...]

  3. The most important graph for the UK economy? | ToUChstone blog: A public policy blog from the TUC
    Apr 16th 2013, 11:57 am

    [...] the absence of either strong growth in household incomes (which looks unlikely at the moment) or extremely rapid rebalancing towards investment and net trade (also looking unlikely at the [...]

  4. This is the chart that will determines how the UK economy does | Liberal Conspiracy
    Apr 17th 2013, 8:51 am

    [...] the absence of either strong growth in household incomes (which looks unlikely at the moment) or extremely rapid rebalancing towards investment and net trade (also looking unlikely at the [...]

TUC