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New Statesman
25-07-2025
- Health
- New Statesman
The truth about junior doctors' pay
Photo byResident doctors have today begun a five-day strike over pay. Wes Streeting has said he will try to keep disruption to a minimum, but previous strikes in 2023 led to more than a million appointments being cancelled. The doctors' union, the British Medical Association (BMA), is asking for a 29 per cent pay rise for resident doctors, who have so far received an uplift in pay of almost 30 per cent since 2022-23, according to the Nuffield Foundation. That sounds like a lot. Are resident doctors (formerly known as junior doctors) being reasonable? The BMA says this is a question of 'pay restoration'; salaries have not kept pace with inflation, and a newly qualified hospital doctor is now paid significantly less, relative to the price of everything else in the economy, than they were in 2008. There are lots of ways to slice the data. Starting at 2008 gives the biggest possible drop in real-terms pay, which is why the BMA is using it for its negotiations. It also uses the RPI measure of inflation, because it says student loans grow by RPI (which is true, but RPI is also, conveniently, higher than the inflation measures used by everyone else). However, it is still true to say that doctors' salaries have reduced in real terms since the peak of their pay growth in 2008. To give a sense of by how much, the numbers start to change: institutions such as the Institute for Fiscal Studies and the Nuffield Foundation prefer to measure from 2010, because that's as far back as proper comparable data goes, and to use the more standard inflation measures of CPI or CPIH. Doing so still shows doctors' pay being compressed, even after the recent rise, by somewhere between 4.1 per cent for those in core training and 10.3 per cent for those in their second foundation year. Some critics of resident doctors point to their generous pensions – the NHS contributes a further 23.7 per cent of their salary to their pension – but this is just another part of their salary; it too can be compressed by inflation. The problem I see in the BMA's logic was revealed by a series of adverts the union created in 2023, which claimed that resident doctors were paid less than people who make coffee in Pret a Manger. 'You can make more serving coffee than saving patients,' the ads read. This was a misrepresentation. In reality, Pret workers could have made up to £14.10 an hour if they got their full bonus and location allowance, while a first-year junior doctor could have been said to be making as little as £14.09 per hour if only their basic wage was counted across a 40-hour week. In fact, a first-year foundation resident doctor was on average taking home considerably more (their average pay when the ads went out was more than £37,000) than a barista. But that wasn't the most revealing thing about those ads. More important was the outrage they implied: it was presented as shocking that a mere milk-frother should be paid an amount comparable to a doctor (although, to be clear, they weren't). Shocking, and counterintuitive: surely being a doctor is a better career than being a barista? Subscribe to The New Statesman today from only £8.99 per month Subscribe And, of course, it is. Walk into any Pret and ask any member of staff if they would like to have the job security and pay progression that are effectively mapped out in the career of a doctor. All of them would. The BMA would argue that doctors earn this by spending a long time getting very expensive qualifications, then doing a hard and socially useful job. Which is true. But it's also well rewarded by the standards of the wider economy. It is still true there is no degree that pays as well as a medical degree five years after graduation. The barista, after a year, might be paid more if the minimum wage rises. The foundation year one doctor (average pay £43,400 according to Nuffield) will receive a significant pay increase because they are now a foundation year two resident doctor with a different pay scale (average pay £51,600), and then they will enter core training (£67,400). This is one of the issues with using inflation as the main negotiating point. It is true to say that the average wage of a doctor at a given point in their career is lower in real terms than it was in the past. But this does not mean that a given doctor is actually being paid less. Data collected by the Office for National Statistics from 2003 to 2017 suggests that, on average, fewer than one in five British workers are promoted each year. So while the BMA can argue that the average British worker has achieved pay restoration while newly qualified doctors haven't, lots of people remain average British workers for their whole working lives, while doctors don't remain newly qualified. The other issue is that inflation is not the same for everyone; it matters less the more you are paid. No full-time doctor makes less than the median wage, even in their first year after qualifying, and their pay progression is rapid from that point; by the sixth to the eighth year after qualifying they are typically making around double the median wage. A GP partner on £160,000 a year experiences inflation very differently to a supermarket worker or barista on £25,000 a year. Lower-income households spend more on essentials, and the lower your income, the more of the price of your consumption is affected by the cost of energy and materials (basic foods such as pasta and vegetable oil increased more sharply in 2022, for example, doubling in price in some cases). People on higher incomes are much more likely to have savings – which benefit from inflation. By using inflation (and the highest inflation measure) to justify its pay demands, the BMA is pretending doctors are just like other people, but they're not. This doesn't mean doctors don't have a right to be annoyed about the compression of their pay. As I've written previously, our tax system disproportionately raises money from people in exactly the sort of pay brackets doctors are in, with some very high marginal rates, while they have very large student loans to pay off and their salaries no longer have the same power in the housing market. Their story is part of a wider story of the middle classes in Britain remaining fairly static in real earnings while people on lower incomes rise to meet them and the pay of a small elite takes off. And in that sense the doctors' strike, while its numbers may be debatable, augurs something very real and more widespread: the creeping spread of middle-class rage at the disappearing prospects of professional life. This piece first appeared in the Morning Call newsletter; receive it every morning by subscribing on Substack here [See also: Keir Starmer is no politician – but this could be his strength] Related
Yahoo
24-06-2025
- Business
- Yahoo
How rising inflation impacts your mortgage and savings
Inflation shot back up to 3.5 per cent in April, having been on a downward trajectory at the start of 2025, before a marginal decrease to 3.4 per cent in May. In part as a result of this sticky inflation, the Bank of England (BoE)'s Monetary Policy Committee has voted to maintain interest rates at 4.25 per cent, following a cut in May. As interest rates are one of the primary ways the BoE looks to control inflation, they are often linked to each other, and each one can have knock-on effects on several areas for people in the UK. The BoE doesn't only consider inflation: economic growth, wages, employment rates and plenty of other factors in the geopolitical landscape can come into play. But with a government-set target of 2 per cent inflation to aim for, interest rates tend to be left higher until inflation looks to be under more control and heading back towards its intended target. Consumer Prices Index (CPI) inflation is usually the figure used as the headline number - this was 3.4 per cent for May. But it's important to also look at the CPI data which includes costs for running households (CPIH), and this was 4.0 per cent for last month. While air fares and fuel fell in price, grocery shopping contributed to higher inflation with some products rising steeply - including chocolate, which has risen more than 17 per cent year on year, the fastest rate on record. While some economists had forecast back-to-back rate cuts for May and June, there is now even a question of whether August's MPC meeting will result in a cut, as inflation lingers and geopolitical events lead to fears of oil price rises. Naturally, homeowners are generally pleased when interest rates come down, and most people are happy when there's not too much inflation. But as both of those have been high recently, repaying mortgages has been more expensive over the past two years unless you were locked into a lower-rate deal that didn't need renewing. Rates have come down twice this year already, 0.25 percentage points each time, and there are plenty of deals on the market at sub-four per cent interest rates as lenders battle for business. Depending on your circumstances and type of mortgage, though, you may have a significantly higher rate than that - some 100 per cent mortgages, for example, start from 5.99 per cent. Mortgage deals also tend to be based on swap rates - future expectations of interest rates - rather than the bank rate itself, which is why lenders can sometimes price them lower than the current interest rate, or move in anticipation of a future cut. Rising inflation, then, won't immediately make your mortgage repayments more expensive - but it could reduce the chances of an immediate interest rate cut. Where mortgages (and any other loans) are cheaper to pay off when the interest rate goes down, the opposite is true for your savings. Banks price their products from the bank rate; therefore, when it starts to come down, we now see most of the best easy access savings accounts paying only just over 4 per cent, when at the start of 2025 there was lots of competition in the 5 to 5.5 per cent range. It makes it important to shop around and ensure your money is earning as high a rate of interest as it possibly can - not just to earn interest, but also to ensure your cash doesn't see its buying power eroded because of inflation. If inflation runs at an average of 3.0 per cent this year and next, then £100 in a bank account will only be effectively worth a little over £94 by the end of 2026. Utilising interest rates, therefore, helps protect your overall cash value - and beyond that, you should look to invest for the long term where possible, such as in an individual savings account (ISA) or pension, as this has a much higher chance of beating inflation and giving better returns over a number of years. Sign in to access your portfolio
Fashion Network
10-06-2025
- Business
- Fashion Network
May UK spending falters, consumers cut back on fashion say Barclays, BRC
The UK's consumer spending and retail spending reports are coming in for May and they don't look that impressive. On Tuesday, Barclays released its general consumer spending data for discretionary categories and the British Retail Consortium/ KPMG their retail sales numbers, with both showing anaemic growth year on year last month. First Barclays. It said consumer card spending was up just 1% in May compared to the same month a year earlier. It had seen 4.5% growth in April (partly boosted by sunny weather and Easter). But this time the weak growth didn't come anywhere near the latest CPIH inflation figure of 3.5%. That said, May's two Bank Holidays and record spring sunshine supported seasonal categories like pharmacy, health and beauty (+12%), and travel (+3.7%), yet this was offset by wet weather in the latter half of the month, amid consumers cutting back and a fall in consumer confidence. Confidence in household finances declined three percentage points to 67%, while the ability to spend on non-essentials dropped to 56%. In response, nearly half of consumers (46%) say they're cutting back on discretionary spending. And even more painful for fashion retail, clothing/accessories is the most common category being reined in. Card spending on clothing rose just 0.9% in May, although the volume of clothing purchases was up 3.8%. This suggests shoppers are still refreshing their wardrobes, but switching to cheaper items or brands, or perhaps that retailers are keeping a lid on prices and cutting them as well in an attempt to shift stock. Despite exercising financial caution, two in five UK adults say they still enjoy treating themselves regularly but are finding budget-friendly options. Popular choices include waiting for sales (41%), opting for smaller, affordable treats (36%, which could boost beauty), and setting aside savings specifically for occasional indulgences (24%). As for the BRC/KPMG report, despite focusing on retail spending specifically rather than general consumer spending, it showed similar patterns to Barclays. In the four weeks from 4 May to 31 May, UK total retail sales increased by 1% year on year and non-food sales actually decreased by 1.1%. In-store non-food sales fell 0.9% and online they were down 1.5%. The online penetration rate (the proportion of non-food items bought online) was flat at 35.9% in May. Helen Dickinson, CEO of the British Retail Consortium, said: 'Consumers put the brakes on spending, with the slowest growth in 2025 so far. This was due largely to declines in non-food sales, as fashion and full price big-ticket items were held back by lower consumer confidence.' And Linda Ellett, UK Head of Consumer, Retail & Leisure, KPMG, added: 'While the sunshine continued, the pace of retail sales growth didn't in May. Early seasonal purchases were likely a factor, as was a dampening of some spending appetite as households reflected upon the recent combination of essential bill rises. Travel demand for the summer months ahead looks healthy, so retailers will be hoping June sees an upturn in related spending as people begin to think about what they want to pack in their suitcase.'
Fashion Network
10-06-2025
- Business
- Fashion Network
May UK spending falters, consumers cut back on fashion say Barclays, BRC
The UK's consumer spending and retail spending reports are coming in for May and they don't look that impressive. On Tuesday, Barclays released its general consumer spending data for discretionary categories and the British Retail Consortium/ KPMG their retail sales numbers, with both showing anaemic growth year on year last month. First Barclays. It said consumer card spending was up just 1% in May compared to the same month a year earlier. It had seen 4.5% growth in April (partly boosted by sunny weather and Easter). But this time the weak growth didn't come anywhere near the latest CPIH inflation figure of 3.5%. That said, May's two Bank Holidays and record spring sunshine supported seasonal categories like pharmacy, health and beauty (+12%), and travel (+3.7%), yet this was offset by wet weather in the latter half of the month, amid consumers cutting back and a fall in consumer confidence. Confidence in household finances declined three percentage points to 67%, while the ability to spend on non-essentials dropped to 56%. In response, nearly half of consumers (46%) say they're cutting back on discretionary spending. And even more painful for fashion retail, clothing/accessories is the most common category being reined in. Card spending on clothing rose just 0.9% in May, although the volume of clothing purchases was up 3.8%. This suggests shoppers are still refreshing their wardrobes, but switching to cheaper items or brands, or perhaps that retailers are keeping a lid on prices and cutting them as well in an attempt to shift stock. Despite exercising financial caution, two in five UK adults say they still enjoy treating themselves regularly but are finding budget-friendly options. Popular choices include waiting for sales (41%), opting for smaller, affordable treats (36%, which could boost beauty), and setting aside savings specifically for occasional indulgences (24%). As for the BRC/KPMG report, despite focusing on retail spending specifically rather than general consumer spending, it showed similar patterns to Barclays. In the four weeks from 4 May to 31 May, UK total retail sales increased by 1% year on year and non-food sales actually decreased by 1.1%. In-store non-food sales fell 0.9% and online they were down 1.5%. The online penetration rate (the proportion of non-food items bought online) was flat at 35.9% in May. Helen Dickinson, CEO of the British Retail Consortium, said: 'Consumers put the brakes on spending, with the slowest growth in 2025 so far. This was due largely to declines in non-food sales, as fashion and full price big-ticket items were held back by lower consumer confidence.' And Linda Ellett, UK Head of Consumer, Retail & Leisure, KPMG, added: 'While the sunshine continued, the pace of retail sales growth didn't in May. Early seasonal purchases were likely a factor, as was a dampening of some spending appetite as households reflected upon the recent combination of essential bill rises. Travel demand for the summer months ahead looks healthy, so retailers will be hoping June sees an upturn in related spending as people begin to think about what they want to pack in their suitcase.'
Spectator
21-05-2025
- Business
- Spectator
Rachel Reeves is to blame for the 3.5% inflation spike
There is no positive spin to be put on this morning's inflation figures, which show the Consumer Prices Index (CPI) rising from 2.6 per cent to 3.5 per cent in a single month. If you want to do the trick of stripping out energy and food prices to arrive at so-called 'core' inflation (how you can have a cost of living index which excludes two of the biggest costs faced by households defeats me) the picture is even worse – core inflation is even higher, at 4.5 per cent. If you want to use the government's preferred measure, CPIH, which includes an element of housing costs, then that too is higher than CPI, at 4.1 percent. Housing costs, energy costs, food, transport – all are going up – with just a small drop in prices of clothing and footwear, and furniture.
