On Tuesday, official data showed that UK inflation, as measured by the Consumer Price Index, rose by 1.7 per cent in the year to February, a slower pace than the 1.9 per cent reported last month. Employee earnings adjusted for CPI fell at their slowest pace since April 2010. If “real wages” were to rise this year, the government hopes this fact would protect it from attacks by the opposition Labour party about the cost of living. The gap between inflation and earnings is more than simply a technical matter.
However, that makes the technicalities more important to understand. The analytical debate about “real wages” tends to focus on measures of wages. But how inflation is measured obviously matters, too. This chart from the Resolution Foundation shows two forecasts for real weekly median earnings – one using CPI and the other using RPI-J, a supplementary measure that includes housing costs and has a controversial history.
The chart below shows how the past few years have been the longest sustained period of falling real wages on record, according to official statistics. Read more
Britons are having less but more varied sex, according to the third installment of a large-scale national survey published today by the Lancet medical journal.
Compared with results from the first and second surveys, which were based on interviews conducted in 1990-91 and 1999-2001 respectively, the likelihood of respondents saying they had sex in the past four weeks (a tried-and-tested research question) decreased significantly. In part, this reflects changes in demographics over the period, for example more single person households. Read more
The supermarket self-checkout machine might look harmless but there is danger amid the bleeps. If it is not accusing the humble shopper of errant barcode scanning, inaccurate citrus fruit selections or placing unidentified items in the baggage area, then it is helping to transform the composition of the labour market. Read more
There might be better ways to spend the money. The policy is also subject to political considerations. (Obviously.) But to see universal free school meals as only a political ploy is to ignore evidence suggesting otherwise. Read more
In his speech today, George Osborne made two arguments in defence of his economic policy. First, that there was no an alternative. Second, that there is no alternative.
In the past few weeks the opposition’s case against the chancellor has shifted emphasis from the existence of a recovery to its nature. The overall picture may be improving, his critics admit, but it does not feel like that for many people. Policy must change to ensure an improvement in “living standards”, the argument goes. But Mr Osborne chose not to accept the premise. Instead, he repeatedly argued that the same approach (albeit with some amendments) that “worked” for the macroeconomy will also deliver on a micro level. Read more
In today’s Guardian, Ed Balls admits that “at last economic growth is returning”. As my colleagues George Parker and Chris Giles note, this is a sign that the political debate over the recovery is changing from when will it begin to “who will own it?”
The answer to that is presumably George Osborne and Mark Carney. But there is another, subtly different question that will also be asked: “who will experience it”? Read more