Autumn Statement shows working people face a hit of £1000 by 2020
The OBR figures released today for the Autumn Statement showed lower economic growth translating into lower wage growth for the next four years. On top of this, weaker sterling has translated into significantly higher inflation, especially in 2017. For working people this is a double whammy that hits living standards – or real earnings – hard.
Overall real earnings are now expected to rise by only £23 a week between 2015 and 2020; at the budget they were expected to rise by £41. This difference of £18 a week amounts to nearly £1000 on the year (£955).
As we all know, in 2016 pay still hasn’t caught up with its pre-crisis peak in 2007.
The chart below shows how long real pay is expected to remain below that pre-crisis peak. A lost decade had already become a lost eleven years at the Budget. It is now a lost thirteen years. And even if we get there (a big if), working people will be significantly poorer that the last time the OBR looked.
This doesn’t look like an “economy working for everybody”.