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LONDON – Britain’s statistical authority, the ONS, has created an insightful if slightly depressing tool that allows people to calculate just how much poorer they’ll be by the end of the year thanks to the Brexit-driven inflation seen in the year since the referendum.
Since the vote, inflation in the UK has surged to its highest level since the summer of 2013, reaching 2.9% at the latest reading earlier in June. That inflation has been triggered almost entirely by the sharp fall in the value of the pound, which has crashed from a value of 1.48 against the dollar prior to the referendum, to around $1.27 now.
Prices are now rising across the board thanks to the fall in the pound seen since last summer’s referendum, with food prices increasing particularly rapidly.
At the same time, however, wage growth remains subdued, with wages increasing by 2.1% including bonuses, and by 1.7% excluding bonuses at the ONS’ last update.
That combination adds up to the average real wage for the average British worker actually falling.
Bank of England Governor Mark Carney nailed the problem during a press conference in May, saying: “This is going to be a more challenging time for British households over the course of this year, real income growth – to use our terminology – will be negative. To use theirs [layman’s] wages won’t keep up with prices for the goods and services they consume.”
The ONS’ calculator, which is embedded below, is pretty straightforward. Input your salary, click “Submit” and see how much poorer Brexit’s first round impacts will make you.