Real Average U.K. Pay Down By 10% In 5 Years
Compared to other countries struck by the economic crisis of the last few years, Britain have so far had only a modest problem with unemployment. It's 8.4% unemployment rate is significantly higher than a few years ago, but compared with the 14-15% unemployment rate in Portugal and Ireland, the nearly 20% unemployment rate in Greece and the 23-24% unemployment rate in Spain, it is low (Italy is more similar to Britain in unemployment with a 9.2% unemployment rate).
As the below chart illustrates, Britain has only had a modest drop in employment. If you take Britain's relatively high population growth into account, it looks worse, with a drop in employment relative to population of more than 5%, but that drop is still a lot lower than in Ireland, Portugal, Greece or Spain.
However, in terms of real wages, Britain has fared as bad or worse than the other countries as this chart illustrates.
So while Britain's more inflationary path seems to have limited its unemployment problem, it hasn't helped overall growth, and has contributed to a greater decline in real wages for the employed.