How far does your money go at the moment? Have you started to wonder why you don’t seem to have that much of it left at the end of the month? Do you ever google ‘online banking conspiracies and/or scams’? Have you ever thought that your bank account might be ‘leaking’?
If the answer to any of the above is yes, you might not actually be as bad with money as you think – life really is getting more expensive and, in real terms, your earnings almost definitely can’t keep up.
Newly released official figures show that average wages are struggling to keep up with the rising cost of goods for the first time in two and a half years. As the pound remains weak and Britain embarks on trying to get a Brexit deal, real people are feeling the pinch in real time.
Inflation is currently at 2.3% if you look at the consumer prices index (CPI). Food prices have risen at the fastest pace in three years, up 1.2% from last year. Meanwhile, wage growth remains low and, once adjusted to take this inflation into account, it is near non-existent according to figures from the Office for National Statistics.
Let’s break that down because knowledge is power and financial jargon is deliberately confusing:
Average weekly earnings, including bonuses, increased by 2.3% last year. However, with inflation at a three-year high of 2.3% (still above the Bank of England’s desired rate), average weekly earnings actually only increased by 0.2% including and 0.1% excluding bonuses over the same year.
While the employment rate looks good, with more and more people in work that’s the slowest rate of wage growth since 2014 according to the ONS, whose figures show that there has been a downward trend since 2015.
If the amount we earn can’t keep up with the cost of housing, food, clothing and transport then it’s likely that we are going to find ourselves increasingly worse and worse off. Of course, none of this is being helped by the weakening of the pound by Brexit.
So, what’s the upshot? Well, there isn’t really one. TBH all of this is nothing short of a perfect storm in economic terms. If there’s a silver lining it’s this: it is actually pretty tough out there and your money is going as far as you need it to, so don’t beat yourself up too much about not being able to save for a house/pension/new laptop.
See also how inflation is going to affect your student loan.
You might also be interested in:
Follow Vicky on Twitter @Victoria_Spratt
This article originally appeared on The Debrief.