In its analysis of Chancellor Philip Hammond’s Spring Budget, the Institute for Fiscal Studies (IFS) has suggested that workers in the UK ‘face 15 years without a pay rise’.
The IFS warned that many households will be affected by welfare cuts, and that the prospect for income and earnings growth ‘remains weak’.
Paul Johnson, Director of the IFS, commented: ‘On current forecasts, average earnings will be no higher in 2022 than they were in 2007. 15 years without a pay rise.
‘All of the productivity – and with it earnings growth – we would normally expect has been lost forever. This remains the big story of the last decade – a decade without growth, a decade without precedent in the UK in modern times.’
A similar warning has been made by the Resolution Foundation: in its own Budget analysis, the think tank found that the UK is in the midst of the ‘worst decade for pay growth for 210 years’. The Foundation also revealed that UK workers are on course to miss out on £12,000 in wage rises by 2020.
Torsten Bell, Director of the Resolution Foundation, said: ‘Britain is set for a return to falling real pay later this year, with this decade now set to be the worst for pay growth since the Napoleonic wars.’