By Sir Keir Starmer’s first anniversary in office, the Resolution Foundation warned that a slowdown in overall pay growth would begin to bite, claiming that growing housing prices will soon surpass the rate of compensation increases.
Its conclusions, which were made public a few weeks following Labour’s resounding election victory, were predicated on projections from the Office for Budget Responsibility and the Bank of England.
It stated that those who are less fortunate would be most affected, particularly if the Treasury chooses not to reverse the proposed Conservative benefit cuts.
According to the foundation, as the cost of living crisis turns, 400,000 additional children run the risk of falling below the poverty line if legislation is not passed, in part because borrowing rates are still high to fight inflation.
The perception that wage growth poses an inflationary danger is one of the reasons rates are not declining more quickly.
Since salary rises put more individuals in danger of financial hardship, the bank wants them to stop, although ideally the government shouldn’t.
