Wages ‘must fall’ by a further 10%

WAGES and prices need to fall by a further 10% to make the economy more competitive but even with these cuts the unemployment rate will hover between 7% and 8%, according to Bloxham Stockbrokers.

The company’s chief economist, Alan McQuaid, also expects house prices to fall by 10% on average this year.

“Prices/wages need to adjust further downward to make the economy more competitive. Another 10% fall is required in our view,” he said.