Shadow Chief Secretary to the Treasury Bridget Phillipson MP responding to the Bank of England’s growth forecasts

Responding to the Bank of England’s growth forecasts which show average real wages are set to fall by £883 over the next two years, Shadow Chief Secretary to the Treasury Bridget Phillipson MP said:

“A downgrade in the Bank of England’s growth forecasts shows how fragile our recovery is.

“The Bank’s increase in forecast inflation and their expectations of weak earnings growth suggests that average real wages are set to fall by £883 over the next two years. This should send a clear message to government to get a grip on the cost of living crisis and a grip on inflation.

“Their complacency is leaving households more out of pocket month by month, and trapping us in a low growth, high tax economy.

“Labour would tackle the cost of living crisis, easing the burden on households by cutting VAT now on domestic energy bills over the winter months, and we’d tax fairly, spend wisely and grow our economy so that our country prospers.”

Ends

Notes to Editors

• The Bank of England forecast average weekly earnings growth of 3.5%, 1.25%, 2.25 in 2021, 2022 and 2023 respectively.
• This is outstripped by their forecasts for CPI inflation – 4.25%, 3.5%, 2.25% in 2021, 2022 and 2023 respectively.
• • Average weekly earnings were £566 in Q4 2020, meaning real earnings will be £17 per week lower in real terms in the last quarter of 2023.

  ONS, AWE, Whole Economy Level (£)https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/timeseries/kab9/emp