James Moore: There's nothing pretty about the pay squeeze, but it can't go on for ever

Outlook Another year of wage freezes? It's coming for a lot of people working in manufacturing, at least according to the industry's trade body, the Engineering Employers' Federation (EEF).

That should be music to the ears of the Bank of England, especially now it is contemplating negative interest rates as a way of persuading banks to lend to get the economy moving.

With wages still flat, or even falling, in a number of sectors (including the public sector), one inflationary pressure at least is out of the equation if the Bank decides on such a radical step.

However, it should be said that there was something of Paul Tucker, the deputy governor in charge of financial stability, reminding us with the musings that he is still very much alive and kicking after being passed over for the top job.

Prescribing such a radical drug as a cure for Britain's credit famine would come with some dangerous side effects. Banks might, anyway, just pass the cost of keeping money on deposit at the Bank of England (the effect of negative rates) on to people who keep money on deposit with them.

As for those on the receiving end of the pay squeeze, the reality isn't pretty. There's a reason retail sales figures put out by the CBI weren't showing a very pretty picture (although they could have been worse). People have less to spend – and if there is anything spare, it's often being used to pare down debt.

About the only retailers that are doing well are those operating online plus land-based discounters such as Aldi, Lidl, Sports Direct and Primark. The trouble for their competitors is that people may not return if and when wages start to pick up. After all, why hand your money over to fancier outlets for the questionable benefit of a slightly more upscale carrier bag on your way home?

According to the EEF, we won't be here for ever, at least when it comes to manufacturing. There are signs that wages are starting to pick up, and this may gain momentum as manufacturers face up to the need to recruit and retain people with the skills they require.

There will come a time when shortages of key staff force wages higher. At the moment, people are still very much of the view that having a job is something to be thankful for even if the rewards aren't up to scratch. That situation can't last forever.