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The chart that shows workers are still £40 a week poorer than they were in 2008 The chart that shows workers are still £40 a week poorer than they were in 2008
(35 minutes later)
The latest monthly pay report was released by the Office for National Statistics today.The latest monthly pay report was released by the Office for National Statistics today.
It shows that average total pay (including bonuses) for the people it surveyed was £491 a week in February. It shows that average total pay (including bonuses) for the people surveyed was £491 a week in February.
That’s pretty disappointing.That’s pretty disappointing.
Taking a three month average of this pay metric (so covering the December to February period) and comparing it to the same three month period a year earlier the rise in average pays is only 1.8 per cent. The Bank of England had expected the annual rate of average pay growth to strengthen to around 3 per cent this year. That now seems a tall order. It’s true that British workers are getting real terms pay rises, not least because consumer price inflation is presently just 0.5 per cent. But it’s not much of one. And much weaker than many economists and trade unionists expected. Taking a three month average of this pay metric (so covering the December to February period) and comparing it to the same three month period a year earlier the rise in average pay is only 1.8 per cent. That's the weakest rate of expansion seen since February 2015.
Indeed, if we use the three month average metric to look back and adjust for consumer price inflation over that period we see average weekly wages are still 7 per cent lower than they were way back in March 2008. That’s equivalent to £40 a week: The Bank of England had expected the annual rate of average pay growth to strengthen to around 3 per cent this year. That is now looking optimistic. It’s true that British workers are getting real terms pay rises, not least because consumer price inflation is currently just 0.5 per cent. But they are nothing to write home about. And pay growth is still much weaker than many economists, trade unionists and workers expected relatively recently.
As the chart shows, since 2014 average wages have begun climbing back up. But at this rate of growth it will still be several years before we get back to where we were on the eve of the Great Recession. The big picture on pay also remains shocking.
If we use the three month average pay metric to look back over the past decade and adjust for consumer price inflation over that same period we see average weekly wages are still 7 per cent lower than they were way back in March 2008. That’s equivalent to £40 a week for the average worker:
As the chart shows, since 2014 average wages have begun climbing back up to the pre-crisis peak. But at this underwhelming rate of growth it will still be several years before we get back to where we were on the eve of the 2008-09 Great Recession. This is almost certainly going to be a "lost decade" for average pay in the UK.