Household squeeze 'to worsen'

The Bank of England governor made clear today that the squeeze on household budgets will only get worse. Sir Mervyn King said he expected inflation to rise to three percent or more by the Ssummer and stay above target for another two years.

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ONS: Real wages have been falling since 2009

The average earnings of UK workers have been falling in real terms for the last three years and are now at 2003 levels, a new article from the Office for National Statistics has shown.

After inflation has been factored in, wages have been shown to be falling since 2009 Credit: Chris Ison/PA Archive/Press Association Images

After three decades of strong growth, real wages peaked in 2009 at £12.25. Since then inflation has outstripped wage increases, leading to real wages of £11.92 in 2010 and £11.41 in 2011.

This means that real wages have dropped by almost 3% between 2010 and 2012.

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