Lost decade on pay

Over the next few years, the continued strength of the labour market should benefit workers at all income levels, according to the EY ITEM Club.

However, aside from people in the lowest income decile, which will benefit from uprating of the National Minimum Wage, the biggest benefits are likely to be enjoyed at the top end of the income distribution range, where skills shortages will increasingly enable workers to bid up wages.

But the squeeze is likely to persist for people on middle incomes, with growth in their wages subdued by strong growth in labour supply, and the threat to routine white collar and skilled manufacturing jobs from increasing automation. The forecaster says that by 2017, real take-home pay will still be lower than 2008 levels across all income groups, equating to a "lost decade".

www.ey.com/UK/en/Issues/Business-environment/Financial-markets-and-economy/EY-ITEM-Club-special-report-on-consumer-spending---In-detail