UK workers' wages growing at lowest levels since turn of 20th century, forecasters predict

Projected average earnings are forecasted to be the lowest for wage growth since 1900s

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The Independent Online

Wage growth for this decade will be at the weakest levels since the 1900s, research has suggested. 

It is feared stagnant average earnings could result in an effective drop in living standards for many Britons who fail to keep up with the rising cost of living. The assessment, by independent policy think tank Resolution Foundation, follows the delivery of the first Autumn Statement since the UK voted to leave the European Union.

Chancellor Philip Hammond revealed Brexit Britain faces a £122 billion black hole, amid slow trade and dwindling growth.

In their economic forecast following the statement, the Resolution Foundation warn: “Looking ahead on the basis of the OBR’s new forecasts and the government’s policy decisions, the picture for living standards is if anything more concerning. The earnings people bring home from work are obviously affected by the same economic changes that have undermined the public finances.

“Average earnings are now forecast to be £830 a year lower than expected in 2020, with this decade now set to be the weakest one for wage growth since the 1900s. Growth of just 1.6 per cent between 2010 and 2020 compares with an increase of 12.7 per cent in the 2000s and over 20 per cent in every other decade since the 1920s.”

They forecast that rising inflation could see the bottom third of earners experience a drop in living standards. The research highlights growing concerns about a social group dubbed 'JAMs' or the Just About Managing by the Policy Exchange i.e. those who do not experience significant financial hardship or poverty, but struggle to get by on a daily basis and have savings amounting to less than one month’s income.

During the Autumn Statement, Mr Hammond announced the Government will ban fees for tenants in rental accommodation, invest in infrastructure such as national roads and the National Living Wage will by 25p per hour to £7.50.

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