Wages are set to surpass inflation for the first time since 2008, according to the spring forecast by the EY ITEM Club. Figures for this year suggest wages will increase by 1.7% while inflation will continue to drop reaching 1.6%. The spring forecast also predicted consistently falling levels of unemployment in the UK over the next two years, from the current level of 7.2% to 6% by the end of 2015.
Peter Spencer, EY ITEM Club Chief Economic Advisor, commented that wage increases will be tempered by growth in the workplace, however “not to the extent of impeding recovery in real wages”. DP