Running economies hot lowers real wages

It doesn’t raise them, as you might have been taught on Twitter over the last 10-15 years.  Here is the report from the UK:

British households are facing the biggest fall in real incomes in 30 years as inflation gallops ahead of wage growth, a stark illustration of the challenge facing central banks as they try to tame prices without snuffing out recoveries from the pandemic.

The Bank of England forecasts that average incomes in Britain after accounting for wage growth, inflation, tax increases and benefit changes will fall by 2% this year—the steepest decline since comparable records began in 1990. The pinch is expected to hold back the broader economy just when it needs all engines firing to propel itself clear of the slump caused by the pandemic.

Here is more from the WSJ.