In the UK, average weekly wages saw their biggest weekly fall in 60 years. According to statistics out from the Office for National Statistics yesterday, average weekly wages in February were £459.10. Back in February last year they were 487.40. That comes in at a fall of 5.8 per cent. However, it seems that the decline is explained by a crash in bonus payments. During the same period, average weekly bonuses almost halved. In fact, average wages without bonuses actually rose, up 2.4 per cent across the economy and by 2.1 per cent in the private sector.
You won’t be surprised to learn that the private sector has been hit harder than the public sector. Average weekly earnings in the private sector, including bonuses, fell by 7.6 per cent, while the public sector actually saw a 3.2 per cent improvement.
So it seems wage deflation is currently restricted to the bonus element of salaries. We will need to watch this story unfold over the next few months to see whether wage falls start applying to standard pay packets too.
© Investment & Business News 2013