No ‘meaningful recovery’ in wage growth expected next year -new analysis
Britons should expect a “standstill year on pay” as wages look set to plateau over the next twelve months, according to new analysis.
The Resolution Foundation has projected, through data to be released at the start of 2018, that no noticeable wage growth is likely until the end of the year.
Using figures from the Office for National Statistics and the Office for Budget Responsibility, the body found that while next year is set to mark the end of the pay squeeze that returned this year, real wage growth is set to be zero over the year as a whole.
The report also found that 2018 looked set to be worse than any year in the three decades running up to the financial crisis in terms of growth.
However, they said the lowest paid workers should expect a 4.3% pay boost in April - pushing up the National Living Wage to £7.83 - while a “surprisingly large fall in hours worked” this autumn suggests productivity growth rose to 1.2% in the three months to October.
“This is stronger growth than seen in any quarter since the end of 2005 and, if sustained, is likely to herald pay rises,” they added.
But is also noted that improvements in peoples’ living standards will also depend on the jobs available, with the previous boom looking to have “run out of steam”.
Director of the Resolution Foundation, Torsten Bell, said while “things will get better” next year, a meaningful pay recovery is “still out of sight”.
He added: “Of course predictions are almost always wrong. But it matters a lot in what way they are wrong.
“Ongoing pay rises for the lowest earners, record employment levels and potentially stronger productivity growth in recent months provide some grounds for optimism.
“But before we get carried away it’s worth remembering that the OBR’s main forecasting problem on pay has actually been excessive perkiness.
“Let’s hope we live up to the Chancellor’s exhortations after the Budget to ‘prove the forecasts’ wrong, otherwise we risk a standstill year for pay packets across Britain.”