VocaLink's UK Take Home Pay Index Falls to 4.1%
VocaLink’s UK take home pay index dropped to 4.1% in August, its largest monthly fall since January. Take home pay is currently being driven by two conflicting forces: the weakness in the UK economy is acting to restrain wage inflation while the increasing cost of living faced by many employees is pushing it up. The manufacturing sector wage growth has had a very poor month falling from a two-year high of 5.4% in July to 4.3%. The latest figures show that industrial output has declined in the last quarter, which reflects the sector’s struggle in a weakening world economy, and that many manufacturers are scaling back as conditions worsen. Although services pay growth increased slightly by 0.1%, it is still being damaged by the reduction in consumer spending which fell in the last quarter. This is a result of higher food and energy bills, tighter credit conditions and falling house prices.