Living Standards to Improve Further: NIESR

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New wage and inflation forecasts from the NIESR reveal a continued improvement in living standards for workers.

The National Institute of Economic and Social Research predicts wage growth of 4.8% in the final quarter of 2024.

This is after the ONS reported that growth in average weekly earnings continues to ease in line with expectations, recording 4.9% for regular pay in the three months to August 2024 and 3.8% if we include bonuses.

The NIESR forecasts regular pay growth at 4.7% for Q3 of this year and 3.9% if we include bonuses.

Lower total pay growth is due to base effects from the one-off public sector bonus payments last year.

Early forecasts expect these figures at 5.0% and 4.8% in Q4 2024.

"With inflation falling, annual growth in real regular pay remains strong at 1.4% in August, meaning workers will see a continued recovery in their standard of living," says The NIESR.

The ONS reported that growth in services sector wage growth continued to fall faster than expected, recording 3.6%, compared to an average of 5.% in the first half of this year.

"This is positive news for inflation and might provide the Bank of England with increased confidence regarding interest rate cuts," says the NIESR.