The standard of living in the United Kingdom is influenced by rising prices and weak wage growth Business


The weak growth of British wages and the increase in prices have produced an impact on the living standards of a severity that normally occurs only during a deep recession, said an important thinktank.

While official figures have shown an increase in earnings growth in recent months, the Resolution Foundation has stated that household incomes have decreased by 0.5% in the period 2016-17 to 2018-19.

In the last 40 years, according to the thinktank, only the recession of the early 80s and the collapse during and after the financial crisis produced a weaker performance.

Household income growth was worse than the recession of the early 90s – a period where real household incomes increased by 0.3% despite house prices being in the midst of a six-fold decline years and the pound crashed outside the European exchange rate mechanism on Black Wednesday in September 1992.

In its audit of the 2019 standard of living, the Resolution Foundation stated that the slowdown in the years following the 2016 EU referendum was part of a broader standard of living after the financial crisis.

This, he added, had been caused by "a severe limitation" of the traditional engine of income growth – increased productivity.

UK productivity growth averaged 2% in the decades before the 2008 banking crisis, but has just risen in the next 10 years. The thinktank said the increase now – a measure of productivity – represented two-thirds of global economic growth before the big financial meltdown, but only 22% of growth since then.

In light of low productivity, families have increased incomes by working more. Employment is 3 percentage points higher than in 2007, while the average number of hours worked has remained unchanged at 32 hours per week since 2007, having decreased on average by an hour every four years in the last century.

Adam Corlett, a senior economic analyst at the Resolution Foundation, said: "Over the past two years, UK households have experienced a near-stagnation in living standards, even worse than the income hit during the recession of the years & # 39; 90.

"Restoring decent levels of household growth is therefore one of the most critical challenges for the incoming prime minister.

"The history of living standards over the past 25 years tells us that there are two ways in which families have traditionally become richer over time – more money thanks to increased productivity and support from more women in the world of work.

"After an unprecedented income squeeze in the last decade and a standard of living perspective that includes child poverty rising to record levels, an economic approach that supports higher incomes for all families must be the main national priority for the incoming PM. "

Theresa May's outgoing government ministers were quick to catch the latest official labor market statistics that show regular pay growth at its fastest rate for 11 years in terms of cash.

The National Statistics Office stated that average annual earnings growth was 3.6% in the three months prior to May, comfortably exceeding the 1.9% increase in the cost of living .

ONS said that between March and May – during which the United Kingdom was gripped by the uncertainty of Brexit – there was a slight increase in employment and the unemployment rate remained at 3 , 8%, the lowest level since the mid-70s.

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Recent surveys of the economy have depicted a bleak picture of investments in mothballs and empty roads, but unemployment measured by the international benchmark has fallen by 51,000 in the quarter to 1,292,000.

The official data took some signs that the UK labor boom is fading, with an increase in employment of just 28,000 in the last quarter. There was a decline of 58,000 full-time jobs, offset by an increase of 86,000 in part-time work. An increase in the working-age population has led to a slight decline in the employment rate.

The labor minister, Alok Sharma, said: "Wages exceed inflation for 16 consecutive months, more people in the world of work than ever and joint female employment means better prospects for many thousands of families of the United Kingdom and demonstrates the continuing resilience of the labor market in the United Kingdom ".

(tagToTranslate) Economy (t) Activity (t) Pay (t) Recession (t) Productivity (t) Work and career (t) Inflation (t) News of the United Kingdom (t) Economic policy (t) Economic growth (GDP) (t) Money (t) Politics (t) ThinkTanks


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