**UK Wage Growth Slows to Record Low, Outpacing Inflation**
**Key Points:**
* UK wage growth has slowed to a record low of 2.8% in the three months to January, the Office for National Statistics (ONS) reported on Tuesday (February 22)..
* This is down from 3.1% in December, and is the lowest level since records began in 2001..
* Inflation, as measured by the Consumer Prices Index (CPI), was 3% in January, meaning that real wages are falling..
* The ONS said that the slowdown in wage growth is likely due to a number of factors, including the impact of the COVID-19 pandemic and the UK’s exit from the European Union..
* The Bank of England has warned that inflation could hit 7% this year, which would put further pressure on households and businesses..
**Analysis:**.
The slowdown in wage growth is a worrying sign for the UK economy. It means that people are not seeing their pay packets grow as quickly as they used to, which could lead to a fall in consumer spending and a slowdown in economic growth..
The COVID-19 pandemic has had a significant impact on the UK economy, and it is likely that this has played a role in the slowdown in wage growth. The pandemic has caused businesses to close or reduce their operations, and this has led to a loss of jobs and a reduction in hours worked..
The UK’s exit from the European Union is also likely to have had an impact on wage growth. The UK left the EU on January 31, 2020, and since then there has been uncertainty about the future of the UK economy. This uncertainty has made businesses reluctant to invest and hire new workers, which has led to a slowdown in wage growth..
The slowdown in wage growth is also a concern for the Bank of England. The Bank of England is responsible for setting interest rates in the UK, and it has warned that inflation could hit 7% this year. This would put further pressure on households and businesses, and could lead to a slowdown in economic growth..
The Bank of England is likely to raise interest rates in the coming months in order to try to control inflation. However, this could also lead to a further slowdown in economic growth..
The slowdown in wage growth is a complex issue, and there is no easy solution. The government, the Bank of England, and businesses will all need to work together to address this issue and ensure that the UK economy continues to grow in a sustainable way..
