Weak earnings growth endangers the recovery - Ernst & Young - United Kingdom

"The worst of the job losses are behind us, with both the ILO and claimant count showing a slowdown in the pace of unemployment increases, and a tentative stabilisation in the labour market is underway. However, in an environment where demand remains weak, firms will continue to cut back jobs in a bid to survive. And this is likely to carry on until the recovery gathers substantial pace – most likely towards the end of next year."

"Yet the peak in unemployment is likely to be lower than in previous recessions. Companies have been keen to minimise job losses, which they have achieved through more creative solutions such as shortened working weeks, temporary shutdowns and wage freezes."

"But the further slowdown in earnings growth is bittersweet news. Weaker average earnings growth will continue to put pressure on households to rein in non-essential spending and poses a serious risk to the economic recovery."

"And the looming threat of further rises in unemployment, albeit somewhat diminished, will encourage consumers to build up their savings to guard against losing their job. We are unlikely to see a consumer led recovery."