Inflation continuing down towards target will help give these numbers some lift.
But the deceleration in *nominal* pay growth is striking, with little sign of abating (this is partly why inflation is falling).
So the trajectory for real earnings is hard to predict, even in the near-term. End/
If you strip out bonus pay you get a more stable, though only slightly more flattering, picture: no growth for two months and just £5/week growth since July 2024. 2/
The headlines are focused on a 5-year high for unemployment.
But the other story is incredibly weak real earnings.
Monthly numbers are volatile, especially when including bonuses, but it's a sign of how bad it has been that 15 months of real growth can be wiped out by one month's volatility. 1/
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Great piece, Giles. As you know, I'm not sure about demand point.
1) We don't know if current rate path ends in soft landing. MPC divided.
2) Knowing how to deal with a problem doesn't mean a problem can't exist - the problem also has to be recognized! (it wasn't at the time in 2010s)
Definitive table of what Government decided to spend it's new tax receipts on.
3/5: Reducing debt and borrowing.
2/5: Making people better off.
Of which:
1/5: U-turn on things making people worse off.
1/5: Actually making people better off.
#Budget2025
Real average weekly earnings have risen by £2 in the past year.
"More wage growth in first 10 months of Labour than in first 10 years of Conservatives" is true only on a technicality, due to Covid.
The reality is wages have been terrible for 15 years and the present government are reproducing the average almost perfectly.
That's also what people are feeling.
A must-read this morning - JRF's @alfie-stirling.bsky.social on the crisis in UK living standards, and how politicians can (and must) respond
There has been essentially no growth in real wages for 10 months.
The latest OBR forecasts suggest the average family may end the current parliament financially worse off than they were at the start.
That's unlikely to be a survivable record to defend at the ballot box, but there may be a way to turn it around.
New piece from me for Political Quarterly.
New report: Taxing landlords more is good, actually.
Since 2016, tax reforms helped slash the growth of the private rented sector and boosted first-time buyers—without hurting existing tenants.
A big housing story hiding in plain sight? ⬇️
Two fab economist roles currently going at @jrf-uk.bsky.social, do get in touch if you have any questions!
How can you tell when a country is over adjusting for financial markets reaction/fiscal rules?
When you see that had Trump announced tariffs just a few weeks earlier, it could have avoided billions in permanent cuts to low income disabled people.
🗣️ "This is particularly painful for the lowest income families."
Our Director of Insight and Policy, @alfie-stirling.bsky.social
spoke to @news.sky.com this morning about the impacts the range of bill increases coming into effect today will have on people's living standards.
When you adjust for these things, it more than wipes out rising incomes under the government's measure.
The danger is that the Chancellor's numbers won't reflect the lived experience of families.
You can't buy food with imputed rent, and you can't just stop paying your rent or mortgage.
But why did the Treasury say households will be £500/yr better off?
They are using a 'national accounts' measure for income that is not designed to capture living standards.
We are using the data government produces specifically to look at disposable incomes, after housing costs.
Not everyone is affected equally.
The poorest third could see their incomes fall around twice as fast compared with the middle and the top, 2025-30.
They are disproportionately effected by job losses, rising housing costs and falling real benefit income, including cuts to disability benefits.
NEW from @jrf-uk.bsky.social.
Much was made of the pressures from a “changing world” on public finances.
Those pressures are also impacting families, and government choices are making it worse.
We find the avg. family will now be £750/yr worse off by 2029, vs today.
Thread.
#SpringStatement
Key differences are the Chancellor's figure:
1. Is gross of housing costs, even though these are rising fast in OBR forecast.
2. Treats 'imputed rent' - what homeowners would get *if* they rented out their home - as income.
3. Adjusts for people not families, when child population is falling
The main drivers are threefold.
1. Interest rates are high (up on Oct forecast), increasing unemployment and feeding through to higher housing costs.
2. Inflation (also forecast to be higher in the near-term) reducing real earnings growth.
3. Frozen tax thresholds sees % tax in earnings rise.
OBR's measure of living standards, RHDI, is up by £500 - largely due to stronger wage growth, including planning reforms which boost incomes.
BUT when you dig into it, 3/4 of the extra income from housing services is 'imputed rents' (what families would receive if they rented out their home).
1/3
This from the OBR on Real Household Disposable Income is key.
Living standards, by their measure, are flattered by non-tangible 'imputed rent' -- that's very much *not* the stuff of "pounds in people's pockets".
And even with this included, overall government policy has lowered living standards.
For more:
bsky.app/profile/alfi...
The past year could prove the high point of the parliament for living standards.
@jrf-uk.bsky.social full writeup here.
www.jrf.org.uk/cost-of-livi...
In case anyone was wondering, this is what it looks like visually.
For more, see the Observer online now/print tomorrow for an exclusive writeup.
@jrf-uk.bsky.social full report coming shortly.
And look out for the update of this analysis on Wednesday, with the latest forecasts. www.theguardian.com/uk-news/2025...
It would take a brave government to stand on that record in 2029.
But if it doesn't, it will put this parliament at risk of being the first on modern record (since 1955) to see falling living standards from start to finish, by the OBR's main measure.
(this chart is from @resfoundation.bsky.social)
