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Workers to be £400 richer this year as wages rise

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The Institute of Chartered Accountants in England and Wales has forecast that workers will be almost £400 better off this year as low inflation and stronger pay growth help drive the first annual rise in real incomes since before the financial crisis. Cheaper oil and falling commodity prices will leave more money in British pockets in 2015, according to the ICAEW, which expects inflation to average 0.5% this year. Inflation-adjusted earnings, however, are expected to rise by 1.5%, or £382 on an average salary of around £25,500. ICAEW economic adviser Scott Corfe said: 'The sharp fall in inflation and increases in earnings growth means the cost of living crisis has come to an end.' He added: 'We do not expect the Bank to raise interest rates until the end of 2015 at the very earliest, and combined with low inflation it means that consumer spending will continue to drive the recovery.' The ICAEW also believes Britain's unemployment rate will fall to 5.2% this year from 5.7% in the three months to last December.

 

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