HOUSEHOLDS in Great Britain are being weighed down by a continuing fall in real earnings, amid weak nominal pay settlements and a Brexit vote-fuelled surge in inflation, latest official figures show.
The Office for National Statistics said yesterday that average weekly earnings for employees in Great Britain, excluding bonuses, were in the three months to September down by 0.5 per cent on the same period of 2016. This marked an acceleration in the pace of decline from the 0.4 per cent year-on-year drop in the three months to August.
Howard Archer, chief economic adviser to the EY ITEM Club think-tank, said: “There is still little evidence that a tight labour market is translating into higher pay, despite inflation being up at three per cent. Thus the squeeze on consumers remains appreciable, with obvious negative implications for personal expenditure.”
The ONS figures show regular pay rose by 2.2 per cent year-on-year in nominal terms in the three months to September. This was well adrift of annual consumer price inflation thus resulting in the real-terms fall.
Figures on Tuesday showed annual UK consumer prices index inflation stayed stuck at a five-year high of three per cent in October. This is up from 0.3 per cent in May last year, before the Brexit vote. Inflation has been fuelled by sterling’s post-Brexit vote weakness.
Stephen Boyle, chief economist at Royal Bank of Scotland, noted there was no Scottish breakdown of the average earnings data but added: “There’s no reason to believe that Scottish workers aren’t facing the same squeeze on their incomes that applies across the rest of the UK.”
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