The UKís employers gave their employees an average salary raise of 2.5% in the first quarter 2014, as the squeeze on worker wages from the cost of living begins to ease, the Income Data Services (IDS) has identified.
In their latest study of the movement in the growth of salaries that workers are receiving, the IDS found that the employees had received an average pay rise of 2.5% in the first three months this year, comprehensively outstripping the current 1.6% rate of inflation, as measured by the consumer price index.
The reality that worker wages are now beginning to grow at a rate faster than the cost of living will be a welcome boost to a multitude of low and middle income houses, who have struggled to deal with rising expenditure demands during an extended period where the growth in wages had been relatively stagnant.
This actuality has prompted a number of opposition politicians and government critics to brandish the country as being in a ëcost of living crisisí, where a consumerís spending power has consistently been reduced and their wages have been ësqueezedí to the limit in order to cope with rising prices.
The news will also be regarded as a personal success for the government and Chancellor George Osborne, who will likely point to its continents as evidence that their difficult long term economic strategy is beginning to impact individualís standard of living in a positive manner.
Ken Mulkearn, head of pay and research at IDS, said: “The main factor in the comparison with the cost of living is the fall in inflation, rather than any rapid acceleration in pay growth.
“However, stronger economic growth may add to upward pressures, and the fact that the national minimum wage is set to rise by 3% will likely have an influence. In any case, it looks like pay could soon be ahead of inflation for the first time in many years.’
British workers have been subjected to six consecutive years of witnessing the actual value of their salaries fall, as inflation has consistently outstripped the rate in which wages have progressed since 2008. However, economic forecasters and the Bank of England have now both predicted that this trend will be reversed in the upcoming months, as standards of living finally begin to pick up and householdís start to feel the effects of the UKís recent economic upturn.
The manufacturing and services sector were identified as the industries which have benefitted the most from the recent reversal in the movement of worker wages, with the IDS highlighting that employees enjoyed a 2.5% rise since the start of 2014, whilst within the manufacturing industry, an average 3% rise was awarded to those who work in the aerospace and defence, food and drink manufacturing, and chemicals sectors.
The news however will be a blow to the Labour party, who had outlined that addressing the ëcost of livingí crisis would be their primary electoral aim, with the data suggesting that the current condition of employment in the country is far less bleak than first thought.
Nevertheless, they will point to the huge levels of personal household debt, the plethora of people currently on zero contract hours and a sooner rather than later rise in interest rates as massive problems that the government has yet to address, with it being feared that a number of people will default on their loans when the Bank eventually does raise its base rate unless better paid jobs and employment opportunities become available.