Bank of England chief Mark Carney predicts pay rises for millions

 
Pay rise prediction: Bank of England governor Mark Carney

Millions of workers will get pay rises outstripping inflation next year, Bank of England governor Mark Carney predicted today.

He also said interest rates could rise shortly before or just after the general election next May.

Despite Britain’s economy recovering and unemployment falling, many households have yet to benefit from real-terms pay increases.

Latest figures showed that pay rises were just 0.6 per cent, once bonuses are excluded, around a third of inflation.

But speaking at the TUC conference in Liverpool, Mr Carney said: “The Bank’s latest forecast expects real wage growth to resume around the middle of next year and then to accelerate as the unemployment rate continues to fall to around 5½ per cent over the next three years.”

Within three years, pay rises could be running at four per cent, he added, though this figure did not include the effect of inflation.

Mr Carney was addressing the theme of the conference which is Britain Needs A Pay Rise, with unions complaining that workers’ pay has fallen in real terms since the coalition came to power.

TUC general secretary Frances O’Grady said there was a cost of living “crisis” in the wake of the economic crash, which unions blame on bankers.

Mr Carney stressed the “Great Recession” had been a “calamity” and that “Britain’s workers have borne many of the consequences.”

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