STOP PRESS: OECD now say 2018 UK real wage decline will be joint worst of all advanced economies
In today’s Economic Outlook the OECD show UK real wages falling by 1.1% in 2018, with nominal earnings growth of 1.5% outstripped by inflation of 2.7%.
This is a big change of view on nominal earnings, which were previously expected to rise by 2.5% (in their March interim forecast). This revision must reflect earnings outcomes coming in significantly weaker than expected. The latest inflation forecast is actually down a little on the March forecast of 2.9%.
The decline means that the UK real wage performance in 2018 will be equal worst in the OECD, with Finland (UK is marginally worse on an unrounded basis). Mexico and Italy are the only other counties expected to experience declines. (Details of calculations are in the notes to editors of the TUC press release – here.)
Across all OECD countries, the average real wage increase is expected to be (plus) 1.1%.
The OECD is clear that we need more public investment to help turn this around – see post here on their assessment of the UK.