UK wages fail to keep pace with inflation

AFP, LONDON: Wages in Britain are falling in real terms but the unemployment rate remains at a 42-year low, official data showed Wednesday.
Average weekly earnings, adjusted for inflation and excluding bonuses, slid 0.6 per cent in the three months to April from a year earlier, the Office for National Statistics (ONS) said in a statement. That was the largest drop since August 2014.
Before taking inflation into account, weekly earnings rose 1.7 per cent -- but this was still the slowest annual pace since early 2015.
Inflation meanwhile surged in May close to a four-year high at 2.9 per cent as a Brexit-fuelled slump in the pound pushed up import costs, recent data showed.
"Wage growth has failed to keep up with inflation and will weigh on consumer spending this year," noted Capital Economics analyst Andrew Wishart.
Economist Samuel Tombs at research consultancy Pantheon Macro added: "The wage figures are astonishingly weak."
The gloomy wages data comes one week after British Prime Minister Theresa May failed to win an absolute majority in a general election that was called to strengthen her Brexit negotiating position.
May won the vote but main opposition Labour leader Jeremy Corbyn scored hefty gains on the back of his anti-austerity campaign.
"People had enough of austerity," ETX Capital analyst Neil Wilson told AFP.
"Austerity was ok when wages went up and inflation (was) low -- but everything's shifted now with Brexit."
Brexit negotiations with Brussels were scheduled to start on June 19 but look unlikely to now as May tries to reach a political deal to stay in office.

UK wages fail to keep pace with inflation

AFP, LONDON: Wages in Britain are falling in real terms but the unemployment rate remains at a 42-year low, official data showed Wednesday. Average weekly earnings, adjusted for inflation and excluding bonuses, slid 0.6 per cent in the three months to April from a year earlier, the Office for National Statistics (ONS) said in a statement. That was the largest drop since August 2014. Before taking inflation into account, weekly earnings rose 1.7 per cent -- but this was still the slowest annual pace since early 2015. Inflation meanwhile surged in May close to a four-year high at 2.9 per cent as a Brexit-fuelled slump in the pound pushed up import costs, recent data showed. Wage growth has failed to keep up with inflation and will weigh on consumer spending this year, noted Capital Economics analyst Andrew Wishart. Economist Samuel Tombs at research consultancy Pantheon Macro added: The wage figures are astonishingly weak. The gloomy wages data comes one week after British Prime Minister Theresa May failed to win an absolute majority in a general election that was called to strengthen her Brexit negotiating position. May won the vote but main opposition Labour leader Jeremy Corbyn scored hefty gains on the back of his anti-austerity campaign. People had enough of austerity, ETX Capital analyst Neil Wilson told AFP. Austerity was ok when wages went up and inflation (was) low -- but everythings shifted now with Brexit. Brexit negotiations with Brussels were scheduled to start on June 19 but look unlikely to now as May tries to reach a political deal to stay in office.