Households feel pinch as pay falls behind inflation

More people are in work but rising prices are eating into pay packages and raising fears for the economy
More people are in work but rising prices are eating into pay packages and raising fears for the economy
TIMES NEWSPAPERS LTD

Growth in wages has officially dropped below the inflation rate, leaving households facing one of the most acute squeezes on consumer spending power in the past 40 years.

While average weekly pay packets broke through the £500 mark for the first time, wages in real terms dropped, according to official employment figures published yesterday. After adjusting for inflation, wages in the three months to April were 0.6 per cent lower than in the comparable period in 2016, the Office for National Statistics said.

Excluding the abrupt deterioration in real incomes in the immediate wake of the financial crisis, this was the worst squeeze on incomes in almost 40 years, the Resolution Foundation said.

Stephen Clarke, an analyst at the think tank, said: “Britain is in