UK Workers Are Facing a Jobs-and-Wages Squeeze |
Britain is facing a double squeeze on wages and jobs over the course of this year. The signs are not promising for how an economy that’s basically stopped growing will cope with a shock to energy prices. For the average worker, the outlook is for more trouble ahead, with incomes stagnating even as consumer prices increase and the jobless rate looks set to climb even higher.
In the first comprehensive survey of British businesses since the Iran war began, there’s marginally good news on prices but bad news on wages. The Bank of England's monthly Decision Maker Panel questioned 2,000 chief financial officers in mid-March. It suggests that there’s little likelihood of rising energy bills triggering a burst of consumer price inflation similar to the spiral that followed Russia's invasion of Ukraine in February 2022 — but that's only because companies reckon demand is too soft to bear significant increases. That's a notable change from their responses four years ago, when executives thought customers would accept higher prices, according to Andrew Wishart, the senior UK economist at Berenberg.