Britain’s real wages, which factor in inflation, are expected fall back almost to a two-decade low.
The average pay of a British employee next year will drop to a level last seen in 2006, according to the latest report on the UK economy by multinational consultancy PwC, released earlier this week.
The professional services network has projected that real wages, which factor in inflation, will plunge by as much as 3% in 2022 and by another 2% during the upcoming year.
“2022 has obviously been a highly challenging year for the UK economy, and it is not surprising that these chilly headwinds will continue throughout 2023,” senior economist at PwC Barret Kupelian said, commenting on the report.
The cost-of-living crisis will persist, the analysts at PwC say, with the weekly food-shop tally rising to £100 ($120), double the rate at the turn of the century. House prices across the UK are set to drop 8%, while sales in the sector are expected to decline below one million for first time in nearly ten years.
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According to the forecast, which finds Britain is on its way to becoming a less happy place to live, the nation will face a 20% rise in divorces to almost 140,000 in England and Wales that is equal to 16 marriage breakups every hour.
The London-based consultancy raised hopes by saying that over 300,000 British workers could rejoin the labor market next year. This is expected to reduce economic inactivity and to alleviate staff shortages in highly skilled sectors. The report adds that the rise in immigration to the UK could also contribute £19 billion (almost $23bn) to the economy, driving 1% of GDP growth.
“Despite a contracting economy, the UK remains an attractive destination for workers,” said Jake Finney, economist at PwC. “In 2022 UK immigration levels reached a record 1.1 million, with targeted schemes aimed at Ukrainians, Afghans and Hong Kong residents adding around 140,000 to the total.”
