EMPLOYEES in Great Britain experienced another year-on-year fall in regular pay in real terms in the three months to January, although the rate of decline eased, official figures show.
The Office for National Statistics said yesterday that average weekly earnings in the November to January period were, excluding bonuses, down by 0.2 per cent on a year earlier in inflation-adjusted terms.
The protracted fall in real earnings in recent months, resulting from weak nominal pay rises and a surge in inflation arising from sterling’s post-Brexit vote weakness, has hit household finances.
Stuart McIntyre, of Strathclyde University’s Fraser of Allander Institute, said: “Earnings continue to grow at a slower pace than inflation. This is putting further pressure on household finances, with associated implications for consumer expenditure and in turn GDP (gross domestic product) growth.”
Including bonuses, average weekly earnings in the three months to January were flat when compared with a year earlier.
In nominal terms, regular pay in the three months to January was up by 2.6% on a year earlier. This was a marginal improvement on nominal year-on-year pay growth of 2.5% in the three months to December.
ONS figures on Tuesday showed annual UK consumer prices index inflation dipped from 3% in January to 2.7% in February. But it remains well above the Bank of England’s 2% target and is much higher than its May 2016 rate of 0.3%.
Laith Khalaf, senior analyst at stockbroker Hargreaves Lansdown, said: “Wage growth still isn’t quite beating inflation, but both pay and prices now appear to be moving in the right direction for UK consumers.”
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here