The Daily Telegraph
UK pay slump is one of worst in the OECD
THE squeeze on British wages is among the worst in the industrialised world, according to the Organisation for Economic Co-operation and Development (OECD).
Wages fell 2.9pc last year after taking into account price rises, compared with a 2.3pc drop across the bloc. The decline was one of the biggest among the OECD’S 38 member countries.
Only Spain, where inflation stands at 10.3pc, and Italy, where wage growth has remained weak for years, suffered bigger falls.
The OECD said the UK’S unemployment rate, at 3.8pc, was below pre-pandemic levels, helping to push up pay. However, wages are being eroded by inflation, which stood at 10.1pc in July.
“Despite a tight labour market and rising nominal wages, real wages in the UK have declined,” the OECD report said.
The Paris-based think tank also warned that the pan- demic had driven people into early retirement, and that many older workers had stopped looking for work.
It also noted that the UK was “one of just a handful” of countries where the employment rate for 55 to 64-yearolds was still below pre-covid levels at the start of this year.
Policymakers at the Bank of England have warned that households will suffer the biggest fall in living standards on record over the next two years, with Liz Truss’s move to cap energy bills at £2,500 a year expected to alleviate only some of the squeeze.
The OECD also found that low income households in Europe’s six biggest economies were being disproportionately hit by Russia’s war in Ukraine.
“Rising food and energy prices are taking a heavy toll, in particular on low income households,” said OECD secretary-general Mathias Cormann.