Wages: Long way to go before workers see material difference in their living standards – Scottish Friendly

Kevin Brown, savings specialist at Scottish Friendly

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NEW figures from the ONS reveal UK wage growth has caught up with rising prices.

Kevin Brown, savings specialist at Scottish Friendly, has commented that there is still a long way to go before workers see a material difference in their living standards. He said:

“There is finally parity between the growth in workers pay and the rate of inflation. Households have been fighting a losing battle for more than a year as household incomes have been falling in real terms due to the speed at which prices have been rising.

“That struggle is over for now, but how long will it last? Wage growth increased by 7.8% over the past three months, the highest level since records began in 2021.

“However, despite inflation falling in recent months, the outlook remains uncertain. Rising fuel prices in August could push the latest official reading back up, which would once again eat into workers pay.

“For households to see a material difference in their finances, inflation will need to fall much closer to the Bank of England’s 2% target.

“Only then will workers’ living standards begin to improve and consumer confidence be properly restored. The majority of families continue to walk a financial tight rope, foregoing their usual spending and saving habits in an effort to stay in the black.”

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