Britain expects biggest drop in real wages in 100 years

The fall in the size of real wages of residents of the UK at the end of the year will be about 7.75%, follows from analysis British Trade Union Congress (TUC – Trades Union Congress). This will be the sharpest decline in the last 100 years.

The TUC also notes that the inflation rate will peak at 13.3% in October 2022. Now the Bank of England has already responded to rising inflation by raising interest rates from 0.1 to 1.75%. Inflation in the country is caused by problems with global supply chains, as well as a lack of energy. The consequence of this could be a long recession and the loss of 1 million jobs, the TUC report said.

“Only once did real wages fall by more than 13.3%, in 1922 in the fourth quarter, when the inflation of wages and prices after the First World War sharply reversed. The only other comparable figure is 7.2% in the first quarter of 1940,” the report states.

4 August Bank of England reportedthat the UK economy is expected to enter recession in the fourth quarter. The regulator noted that inflationary pressure in the kingdom has increased significantly – mainly due to a significant increase in wholesale gas prices and the risks associated with limiting Russian gas supplies to Europe.

At the end of May, the inflation rate in the UK reached 9.1%, which was the highest value in the last 40 years. As a result of rising prices, about 60% of the adult population of the country began to save on essentials, the situation was also aggravated by a decrease in the level of real wages.

Subscribe on Vedomosti on Telegram and stay up to date with the main economic and business news.