UK average ‘real’ wages in 2023 likely to fall to their lowest level in more than a decade: PwC

Britons hoping for a new year's, holiday season salary bump amid high inflation and cost of living crisis will likely be met with disappointment. As per a new estimate the average worker's pay next year will fall back to a level last seen more than a decade ago.PwC estimates show that once inflation is taken into account, the average pay in 2023 will fall down to 2006 levels. As per a CNN report, PwC further predicts that real wages which factor in inflation are expected to fall by almost three per cent in 2022. It will see another two per cent fall in 2023.

Watch |TUC: 2022 the worst year for real wage growth in almost 50 years | UK

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Recent weeks saw widespread protests and walkouts across many verticals of the UK economy like railways, schools, hospitals, nurses, and postal services. However, the report confirms that even as inflation hits double digits and the nation witnesses its worst cost-of-living crisis in decades the future of wages isn't that bright.

Barret Kupelian, a senior economist at PwC said, "2022 has obviously been a highly challenging year for the UK economy, and it is not surprising that these chilly headwinds will continue throughout 2023."

However, the report did offer some hope. It forecasts that in 2023, in spite of the low wages, more than 30,000 workers could join the UK workforce. This as per the PwC will help alleviate staff shortages and reduce economic instability. An increase in immigration too could potentially boost the economy by one per cent, contributing £19 billion ($23 billion)"even as the whole economy contracts," said PwC.

Kupelian further added that inflation in UK is most likely to have peaked in October 2022 and will gradually begin to return to target over the next two years.

(With inputs from agencies)

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