Inflation 'exceeding wage growth'
Inflation is now greater than the growth in take-home pay (THP), according to new figures.The THP index from Voca, a provider of payment services to banks and corporate companies, shows that the annual rate of growth in THP eased to 3.6 per cent in April.This represents a 0.1 per cent fall from March's growth rate and indicates a gradual squeeze on people's finances.In the service sector THP growth fell from 4.3 per cent in March to 3.6 per cent in April. In comparison the manufacturing sector saw a rise in growth from 2.7 per cent to 3.4 per cent in April.Commenting on the figures, Richard Cooper, head of marketing and communications at Voca, said that they show THP continuing to decline."The impact of the widely predicted interest rate rise this week will be a further squeeze on household finances as mortgage interest repayments rise," he added.Douglas McWilliams, chief executive of Cebr, the economics consultancy which analyses the take home pay index for Voca, said: "The Retail Price Index is growing at an annual rate of 4.8 per cent in March compared to the Voca take-home pay index which increased by 3.7 per cent."Inflation has now outstripped take home pay growth for the previous seven months. The implication is that a rise in workers' cost of living is exceeding growth in their wages, which drives living standards down."
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