Wages to outpace inflation as cost of living eases
Average pay is about to outpace inflation in a sign that the cost of living is easing, according to economists.
New data out next week is expected to show the consumer price index (CPI) falling from 7.9% in June to about 6.8% last month.
Average earnings, also due out next week, are likely to show a rise in wages of slightly more than 7%.
The figures, would represent the first time in 14 months that earnings have grown faster than inflation.
Economists have told The Times they now expect wages to grow faster than inflation until at least 2025.
Ashley Webb, UK economist for Capital Economics, a consultancy, said: “We are moving in the right direction and we have now reached an inflection point where incomes are going to start rising higher than prices.
“The cost of living crisis appears to be coming to an end.”
If the data is confirmed it will come as a huge relief to the Tory government ministers who have seen support disappearing but have insisted the battle against inflation had to be won, despite the pain being felt across the economy.