UK income growth lagged peers between 2007 and 2019, says think tank

London: Incomes in Britain grew at half the pace of those in the US and lagged even further behind those in Germany over the 12 years to 2019, researchers said.

With campaigning for a July 4 election focusing largely on the economy, the non-partisan Institute for Fiscal Studies (IFS) said median incomes in Britain grew by 6 per cent between 2007 – at the onset of the global financial crisis – and 2019, before the Covid-19 pandemic.

By comparison, it rose by 12 per cent in the US and 16 per cent in Germany, according to the data, which echoed other signs of the hit to incomes in Britain compared with fellow rich economies.

The UK’s relative performance had not improved in the years since the pandemic, the IFS said.

“Although there has been a widespread slowdown in growth internationally since the financial crisis, the UK has fallen from being one of the fastest growers prior to the Great Recession, to one of the weakest performers,” Tom Waters, an associate director at IFS, said.

Only France, Spain and Greece performed worse over the period among the 14 countries analysed by the IFS.

The IFS said in the period between the 2009/10 and 2022/23 financial years, median incomes in Britain also grew by 6 per cent, much slower than growth of 30 per cent that would have been expected before the global financial crisis.

Weak pay growth underscored the need to improve the country’s weak productivity record, it said.