Why are wage rises lagging behind inflation?

UK inflation measured by the consumer prices index (CPI) was 2.7% in the year to September, unchanged from August.

However, most people's wages have not increased at the same rate, leading to a fall in disposable incomes.

BBC Breakfast heard from some people in Norwich: "Everything's going up apart from salaries" said one man.

Gary Cook, an economist from the University of Liverpool's Management School, said wages were lagging because there was, "still a lot of slack in the economy and the labour market is really quite weak".

  • Section
  • Published