Wages to beat inflation for first time in eight years - E&Y

Wages are set to rise above inflation this year for the first time since 2007, according to economists at Ernst & Young.

According to the EY ITEM Club, real wages will rise by 1.8% this year and will increase steadily further in subsequent years. By 2018, wages are expected to grow by 3.7%. Real average earnings have fallen 8% since 2008, but falling inflation means this situation is changing, with wages outstripping prices. CPI inflation grew just 0.3% in the year to January, helped by the falling oil price, and the Bank of England has forecast it may dip into negative territory. In the three months to December, average earnings including bonuses increased by 2.1% from a year earlier. The firm said ...