U.K. workers' real earnings are expected to decline in 2018, with the country set to register the worst wage growth among 32 Organisation for Economic Co-operation and Development wealthy nations, according to an analysis from the Trades Union Congress.
Wages are expected to fall by 0.7% when taking account of inflation, which has risen to 3.1% in the 12 months to November, overshooting the 2% target set by the Bank of England. The surge in inflation is attributable to the pound's weakness since the U.K.'s vote to leave the EU, driving up the cost of importing food and fuel, The Guardian reported.
Spain and Italy are also projected to record negative real wage growth but both will still rank higher than the U.K. Hungary is expected to top the chart in terms of wage growth, with pay expected to accelerate by 4.9% in 2018. Earnings in the eurozone bloc is projected to grow by an average of 0.6%.
Trades Union Congress General Secretary Frances O'Grady said: "On current projections, average pay won’t recover until 2025."
Meanwhile, a separate analysis from the U.K.'s Resolution Foundation found that there will be no real wage growth in 2018.
"Our own projection is that the pay squeeze may well get deeper before it eases during 2018 as inflation recedes," according to Torsten Bell, the director of the Resolution Foundation. "A noticeable year-on-year rise in real pay isn't forecast to take place until December 2018."
The lowest paid workers are set for a pay rise of 4.3% in April as the minimum wage increases to £7.83, the Resolution Foundation said. Meanwhile, productivity growth is expected to reach 1.2% in the three months to October, which, if sustained, is likely to drive pay rises.
Inflation-adjusted average weekly earnings including bonuses declined by 0.2% in the three months to October.