Zero-pay growth predicted in 2018 for quarter of British workers

LONDON, Dec. 27 (Xinhua) -- More than one-in-four working households in Britain expect their financial situation to get worse in 2018, think tank Resolution Foundation said in a report Wednesday.

In its latest earnings outlook, the organization said Britain's pay squeeze is set to get worse before it gets better in the coming year. Public expectations appear to be moving in line with experts' pessimistic predictions.

Torsten Bell, the foundation's director, said: "2017 was a tough year for living standards as the pay squeeze returned. The good news is that things will get better next year. The bad news is we may only go from backwards to standing still, with prospects for a meaningful pay recovery still out of sight."

The report analyses data from the Office for National Statistics and the official Office for Budget Responsibility (OBR) to forecast that 2018 will mark the end of the pay squeeze that returned this year, but not the start of a meaningful recovery in pay packets, as real wage growth is set to be zero over the year as a whole.

The foundation projects a tightening of the pay squeeze, with no noticeable wage growth until the end of the year.

"While zero real wage growth would make 2018 worse than any year in the three decades running up to the financial crisis, it would make it better than average for post-crash Britain," said the report.

The foundation says wider household income growth in 2018 largely depends on what happens to pay packets as Britain's five-year job boom looks to run out of stream. Ongoing cuts by the government in welfare benefits will also play a big part in living standards prospects for millions of low and middle income families.

Bell added: "Over half expect no pay rise next year and households are just as likely to expect their financial situation to get worse as improve next year. This pessimism is strongest among those on lower incomes, unsurprisingly given big benefit cuts set to take place." Enditem