A Record Deflation of Wages Hits Britain

The rise in the cost of living is burden enough. Now, British workers are grappling with lower pay.

An August 16 BBC headline sums it up:

Wages fall at sharpest rate on record

That headline applies to the period between April and June.

Back in February, Bank of England Governor Andrew Bailey drew the wrath of many when he said to the BBC that Britons should refrain from asking for a pay hike in 2022, even when Bailey gets an annual pay package of £575,000. That’s 18 times the national average.

Bailey made that comment when the mood among Britons was already trending negatively, as reflected by the big-picture downtrend in the FTSE 100.

In May, sentiment toward the Bank of England marked a negative milestone. Here’s a chart and commentary from Elliott Wave International’s July Global Market Perspective:

In May, sentiment toward the BoE took another big step in the bearish direction, when its net satisfaction ratio slumped below zero for the first time since the survey began in 1999.

Even during the most volatile days of the financial crisis in 2008, and even during the scariest days of Europe’s sovereign debt crisis in 2012, net satisfaction never fell below 5. With a majority of respondents now viewing the bank unfavorably, the survey unquestionably captures the high degree of negative mood trend that is currently afoot.