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Highlights
- A TUC study has stated that UK real wages are predicted to contract over the next two years by 6.2%.
- This is the most significant shrinkage in real wages among all G7 economies.
- TUC's earlier research shows that UK workers lost around £20,000 in actual earnings from 2008 to 2021.
A new report claims that UK workers are ready to witness the worst squeeze in real wages among the economically leading countries. According to the latest study by the Trade Union Congress (TUC), UK real wages are predicted to contract over the next two years by 6.2%, or £1,750. This is the most significant shrinkage in real wages among all G7 economies.
The union organisation claims that the UK workers will be among the worst sufferers facing the cruellest wage dips in modern history. Compared to the UK, pay growth in other countries is expected to bounce back to normalcy faster.
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Inflation levels in the UK have been off the roof, hitting a 40-year high of 9.1%. As pay growth has not been in line with the soaring inflation, TUC has claimed in earlier research that from 2008 to 2021, a loss of approximately £20,000 in actual earnings was faced by UK workers.
Amid the escalating cost-of-living crisis, wage stagnation has hit Britons, making it more challenging to pay off the rising food and fuel bills. According to General Secretary of TUC Frances O'Grady, the Conservatives have taken the UK to the club of the bottom-most countries for pay growth after repeatedly pledging to create a high-wage economy. Raising the wages should be the focus for Tory leadership candidates now.
Amid the falling real wages and rising prices, UK investors can consider buying these 3 stocks.
Diversified Energy Company plc (LON: DEC)
The shares of the US-based oil and gas producer, Diversified Energy Company plc, witnessed gains of 0.74% at 8:20 AM (GMT+1) on 15 July and were trading at GBX 108.50. ON Friday, the FTSE 250 constituent had a market cap of £916.49 million. Over the past 12 months, as of 15 July, the company's performance has been positive, and it has given its shareholders returns of 5.55% and 3.64% on a one-year and YTD basis, respectively. However, its EPS currently lies in the negative territory, at -0.03.
Imperial Brands plc (LON:IMB)
The shares of the UK-based tobacco producer, Imperial Brands plc, were witnessing a surge of 1.47% at around 8:30 AM (GMT+1) on 15 July and were trading at GBX 1,831.50. As of 1 Friday, the FTSE 100 constituent holds a market cap of £17,154.87 million. Over the past 12 months, as of 15 July, the company's performance has been positive, and it has given its shareholders returns of 14.65% and 13.09% on a one-year and YTD basis, respectively. IMB is offering investors an annual dividend yield of 7.7%.
Investec plc (LON: INVP)
The financial services provider's shares, Investec plc, witnessed a fall of 0.70% at around 8:30 AM (GMT+1) on 15 July and were trading at GBX 412.40. As of 15 July, the FTSE 250 constituent holds a market cap of £2,890.83 million. Over the past 12 months, as of 15 July, the company's performance has been good, and it has given its shareholders returns of 55.15% and 9.35% on a one-year and YTD basis, respectively. INVP is offering investors an annual dividend yield of 6.0%.
