Shocking new analysis by the Resolution Foundation has revealed pay in real terms won’t be back to 2007 level until 2025.
According to the research average annual pay peaked in the autumn of 2007 at £31,644 (in 2016 prices).
Once inflation is taken into account, average pay will not be back at those levels until the start of 2025 – some 17 years since the financial crash struck.
The Resolution Foundation’s report, Freshly Squeezed, warns that Britain is on course for the longest fall in living standards since records began more than 60 years ago.
Torsten Bell, the think tank’s director, said: “Faced with a grim economic backdrop the chancellor will see this budget as a political success. But that would be cold comfort for Britain’s families, given the bleak outlook it paints for their living standards.”
Even though the national living wage for workers over 25 is to rise to £7.83 next April, an almost 5 per cent rise, the target of it hitting £9.30 by 2020 has slipped and it won’t get to £9.10 until 2022.
Low productivity alone is also set to add £90 billion to government borrowing over the coming five years, which means austerity is likely to lasts longer. An eventuality that is compounded by low economic growth rates and a steadfast deficit.
This graph is so bad it’s almost hard to believe: pay in real terms won’t be back to 2007 level until 2025 https://t.co/626LXPYSb7
— Matt Chorley (@MattChorley) November 23, 2017