The latest research by tax specialists, RIFT Tax Refunds, has revealed that while inflation is more than wiping out wage growth across the UK, there are no less than four G10 nation’s with a far level of real wage growth.
RIFT analysed the current rate of real wage growth based on the increase seen in earnings versus the current rate of inflation across each G10 nation to reveal how the UK is currently performing on a global basis.
The latest figures show that actual wage growth is currently at 6.4% across the UK, the second highest of all G10 nations behind Belgium. However, while inflation has eased from the 41 year high seen in October of last year, it remains at a notable 10.5%. This is the highest current rate of inflation of all G10 nations and means that real wage growth in the UK is currently -4.1%.
While all G10 nations are currently home to negative real wage growth, it’s Belgium that is faring best in the current global economy. While the rate of inflation across the nation is currently 8.1%, it’s also home to the highest rate of actual wage growth at 7.1%, meaning the deficit between the two sits at just -1%.
The United States (-1.2%), Switzerland (-1.7%), Canada (-2.1%), Netherlands (-2.8%) and Japan (-3.5%) also rank above the UK in this respect.
While the current rate of inflation in Germany is comparatively lower than the UK at 8.6%, the nation has seen a -5.7% reduction in actual earnings, with the balance between the two the worst of all G10 nations at -14.3%. Even Russia is faring better than Germany on this basis, with the rate of real wage growth currently at -11.5%.
Both Sweden and Italy are home to some of the highest current rates of inflation outside of the UK at 12.3% and 10.1% respectively. With both nation’s also home to low rates of actual wage growth, they also rank as some of the worst countries when it comes to the rate of real wage growth. In Sweden real wage growth is currently -9.3%, while in Italy it’s -8.6%.
France is the only other G10 nation with a worse wage growth to inflation ratio than the UK. Wages have crept up by just 0.9% across France while inflation is at 6%, resulting in a balance of -5.1%.
CEO of RIFT Tax Refunds, Bradley Post said, “The current economic landscape is rather gloomy, to say the least, and while UK inflation has eased in recent months, it remains the second highest rate when compared to all G10 nations.
So despite the fact we’ve also seen some of the strongest levels of wage growth in the G10, we currently sit in the bottom half when it comes to the level of real wage growth.
Of course, while it’s hard to ignore the current cost of living crisis at our own front door, it certainly could be a lot worse, with Germany, Sweden, Italy and France all suffering to a far greater extent.”