You may be expecting a big pay rise next year, but your employer likely isn’t planning on it. Half of UK workers are counting on a pay increase in 2018 and expecting, on average, a 4% bump, according to a survey by Fidelity International. Young people are feeling especially optimistic about their salary prospects. Meanwhile, managers are only banking on an average 2.8% rise. The UK will be one of the worst places for real wage increases next year.
Meanwhile, inflation is hitting British consumers hardest at the grocer’s with food prices increasing 4.1% in the past year, the fastest rate since 2013. It’s particularly bad on vegetables (+5.7%) and coffee, tea and chocolate (+8.5%). The overall inflation rate held steady at 3% in November, the joint highest since 2012, with lower fuel bills compensating for food prices. That’s both good news — it’s slightly below expectations — and bad: hikes in food prices are toughest on poor families, and with wage increases not keeping up, real income is actually declining for many households.