Inflation continues to outpace inflation in the UK, with workers facing the longest squeeze on living standards since the 1870s.
Chancellor George Osborne had called wage growth a “lagging indicator” and said that it would soon follow the growth in output. However, while GDP has grown a respectable 0.7% over the last three months, according to the latest figures by the Office for National Statistics (ONS), wage growth of 0.7% is once again behind 1.2% inflation.
After five years of the government claiming to have steadied the ship and returned the UK to growth, the majority of Britons’ see their finances to continue to be squeezed.
The rise in employment should be welcomed, but the flat income receipts to HMRC demonstrate that the new jobs created since 2008 have almost all been low paid roles. Real economic growth comes with the creation of new roles for all across the board, not just positions at minimum wage, and this is an area where the coalition have failed.
Moreover, even the figures that show GDP growth may be optimistic, as although the UK’s output has grown to be 3.4 per cent above its pre-financial collapse peak, the population has grown by 4.5 per cent over the same period, which means that the UK’s GDP per capita remains over one per cent lower than in 2008.
