POLITICS

Here Is Why Your Wages Will Be Growing 'Painfully Slowly' In 2015 (GRAPH)

11/02/2014 12:17 GMT | Updated 11/02/2014 12:59 GMT

Household incomes will only start to rise next year, but only at a "painfully slow" rate, new research by the Resolution Foundation has found.

wages

The thinktank estimates that household living standards will still be 3.5% lower in 2018-2019 than before the 2008 financial crash and looks set to only fully return to pre-crash levels in 2022.

According to the foundation: ""Household incomes will start rising in 2015 - but painfully slow recovery means many years before losses are restored."

“Growth in disposable income for the typical household is likely to be modest, barely positive in 2015-16 and less than one per cent a year for each of the following three years.

"As a result, despite improving, typical living standards will still be 3.5 per cent lower in 2018-19 than they were before the financial crisis of 2008, only just inching above the level they were last at in 2005-06."

The foundation added: "The last five years have almost certainly left a large permanent scar on wages in Britain. Many working households will be running up a down escalator in the recovery.”

Resolution Foundation chief executive Gavin Kelly said: “Our evidence suggests that the fall in living standards is bottoming out and should start to rise again next year. That’s the good news and, given year after year of decline, it will come as a relief. But the hit to our living standards will take many years to repair.

A Treasury spokesman pointed in its defence to a new report from the Confederation of British Industry saying the UK economy was experiencing the "right kind of growth".

The spokesman said: “Today’s report is further evidence of the ‘large impact’ that the Great Recession has had on hardworking families."

“But as the CBI report this morning revising up their forecast for growth in 2014 and 2015 shows, the government's long term economic plan is working and is the only way to improve the economic security for Britain’s hardworking people.”

CBI Director-General John Cridland said: “We are starting to see signs of the right kind of growth. In our view this is not a debt-fuelled, housing bubble-led recovery - our forecast shows encouraging signs that business investment and net trade are starting to play their part."