The cost of living is rising almost three times faster than wages, the TUC says today ahead of the latest inflation figures due to be published at 9.30am later this morning.
The most recent available figures show the RPI measure of inflation running at 5.2% in August, compared to earnings growth of just 1.8% in the same month – meaning that wages fell in real terms by 3.4%.
With earnings growth falling in recent months as the economic recovery comes to a standstill, the big squeeze in living standards will worsen unless inflation falls sharply in the coming months, says the TUC.
However, the independent forecast for today’s figures suggests they will show that RPI inflation rose to 5.4% in September.
While ministers are expected to blame the UK’s continuing economic woes on the previous government and the Eurozone, the government has had a direct hand in the growing earnings gap through growth-sapping spending cuts and the inflation-fuelling VAT rise, says the TUC.
Nigel Costley, regional secretary of the South West TUC, said: “Ministers just don’t get the squeeze on ordinary people’s living standards. Few people have seen a decent wage increase and their tax credits have been cut. Prices go up every month with the biggest increases in basics like food, fuel and energy, all of which hit the poorest families the hardest.
“The economy is being run into the ground. Government is cutting back, consumers have no spare cash and our export markets look increasingly depressed as austerity grips the world. What we need from the government is a fundamental change in direction, not desperate attempts to shift the blame to the Euro crisis.
“With consumer spending such a key part of economic growth, wages need to be at the heart of our economic recovery. This country needs a plan B that prioritses growth.”
(from a press release)