UK consumers to feel the pinch as inflation outpaces wage rises

British wage growth won't keep up with soaring inflation this year, according to economists in a Reuters poll who were concerned a consumer spending slowdown was underway. Shoppers have been one of the main drivers of economic growth since Britain voted in June to leave the European Union and any signs they are reining in spending will be a worry for policymakers.
Prices are expected to climb 2.6 percent this year, the poll of 60 economists taken this week found, yet wages will only rise 2.4 percent, crimping household budgets. Twenty-four of 33 economists who answered an extra question said they were concerned a consumer spending slowdown was underway while six were very concerned. Only three were not concerned. "While at least some pick-up in wage growth looks as though it is in prospect, we don't think nominal wage growth will rise as quickly as inflation, suggesting that real earnings growth will probably be fairly subdued," said Ruth Gregory at Capital Economics.