Newspaper article The Evening Standard (London, England)

THE BIG SQUEEZE; MILLIONS OF FAMILIES ARE LEFT WORSE OFF AS BREXIT EFFECT HITS LIVING STANDARDS BUT THERE'S GOOD NEWS ON UNEMPLOYMENTForecasts of No Wage Growth for Two Years

Newspaper article The Evening Standard (London, England)

THE BIG SQUEEZE; MILLIONS OF FAMILIES ARE LEFT WORSE OFF AS BREXIT EFFECT HITS LIVING STANDARDS BUT THERE'S GOOD NEWS ON UNEMPLOYMENTForecasts of No Wage Growth for Two Years

Article excerpt

Byline: Jonathan Prynn and Nicholas Cecil

MILLIONS of families have been left worse off by a painful "Brexit squeeze" biting into their spending power, official figures show today.

Wages, excluding bonuses, were up 2.1 per cent in the three months to March, but fell 0.2 per cent after inflation is taken into account, according to government statisticians. The fall in real wages follows a spike in the cost of living after last year's post-referendum plunge in the value of the pound.

Opposition leaders immediately seized on the figures, which come three weeks before the nation goes to the polls.

Shadow chancellor John McDonnell said: "These figures bring home the Tories' total failure to improve the living standards of working families." Liberal Democrat leader Tim Farron said: "This is the start of Brexit squeeze that millions of people were conned into voting for." However, Chancellor Philip Hammond said: "We have some inflation passing through the economy, this will be transient, it's a result of currency movements last year." Today's wages figures from the Office for National Statistics -- the last before the general election -- come 24 hours after it was revealed that the Consumer Prices Index hit 2.7 per cent last month.

This suggests that the gap between pay and inflation will only widen further as the first anniversary of the June 23 vote to leave the European Union approaches. Public sector workers subject to a one per cent cap on wage Continued on Page 2 Continued from Page 1 increases will be particularly badly hit. City workers are doing better, as real wages actually rose 0.1 per cent if bonuses are taken into account.

Andrew Hood, senior research economist at the Institute for Fiscal Studies, said: "The big change compared with a year ago is not weaker growth in people's cash earnings but higher inflation.

"That's down to a number of factors, among them the fall in the value of the pound since the Brexit vote. Official forecasts suggest that there will be no growth in average incomes over the next two years."

Questioned on the figures today, Theresa May insisted that the pound had started falling before the Brexit vote. …

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