So says the Institute for Fiscal Studies think-tank which expects median income for those aged between 22 and 59 to be lower in 2014-15 than in 2007-08, after adjusting for the impact of inflation.
Living standards have risen more slowly than in previous recessions, because of weak earnings growth
tax increases and benefit cuts, part of the government's actions to reduce the deficit, have also had a negative impact on average incomes
The IFS analysis is based on figures from both the Labour Force Survey, the huge continuous survey that the Office for National Statistics uses to measure unemployment, and from the government's independent forecaster, the Office for Budget Responsibility.
It has then projected the data forward to be able to make more up-to-date forecasts.
Other findings of the analysis are that:
- Median household income in 2014-15 is now back to the same level as it was in 2007-08, but is still more than 2% below its 2009-10 peak
- Median household income grew by just 1.8% between 2011-12 and 2014-15
- Median income for those aged between 22 to 30 is 7.6% lower in 2014-15 than in 2007-08, while for those aged 31 to 59 it is 2.5% lower, but for those over 60 it is 1.8% higher
The findings will help confirm the ongoing battle to see real growth in wages over and above the recent trend rise due mainly to low/falling inflation
The BOE are watching wages/earnings like hawks, literally, as the main trigger for the promised rate hikes which, imho, aren't going to happen any time this year
Full article and analysis from economics editor Robert Peston from the Beeb here
Full report froim the IFS here
