Yet again inflation has outpaced wages as figures realeased today by the Office for National Statistics show the Consumer Price Index at 2.7 per cent.
Yet again inflation has outpaced wages as figures realeased today by the Office for National Statistics show the Consumer Price Index at 2.7 per cent.
Despite the fact that CPI inflation is down from July’s figure of 2.8 per cent, the figure is still well above the government’s 2 per cent target – as well as above increases in average pay.
The Retail Price Index (RPI) also rose 3.3 per cent in August, an increase of 0.2 per cent after rising by 3.1 per cent in July.
Wages in the UK have seen one of the largest falls in the European Union during the economic downturn. Hourly wages have fallen 5.5 per cent since mid-2010 once inflation is factored in. Average pay (excluding bonuses) rose by just 1.1 per cent over the three months to June 2013 compared to a year earlier.
Wage growth is also likely to remain flat for the remainder of 2013, averaging 1.5 per cent, according to an overview of forecasts compiled by XpertHR.
The graph below shows CPI inflation since June 2009.
Commenting on today’s inflation figures, Labour’s treasury minister Cathy Jamieson MP said prices were “still rising much faster than wages the cost of living crisis under David Cameron continues”.
“After three damaging years of flatlining, working people are worse off by almost £1,500 a year under this Tory-led government. But rather than helping ordinary families David Cameron is so out of touch he has given a huge tax cut to millionaires instead,” she added.
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