Wages to increase 2.5% this year says OBR

The real cash value of wages hasn’t increase since 2007, but wages are expected to be on the up this year – this is likely to fuel extra competition in the employment market and businesses should be realistic about their own wage offerings if the trend in wages starts to outstrip inflation.

In a study published alongside the budget the Office for Budget Responsibility confirmed that real wages would not return to their pre-recession cash value until at least the second half of 2017, representing an effective 10 year freeze against 2007 cash value. The OBR predicted though a 2.5% increase in wages this year, rising to 3.2% next year, against an inflation rate of 2%.

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