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Equilibrium’s finance and investment news roundup

Our roundup this week includes a predicted slow growth to UK wages, a switch to cashless payments among young adults across the country, an increasing number of consumers switching electricity provider and further possible price hikes to rail fares.

Pay growth forecast to remain weak

Pressures on household incomes are set to continue as pay rises are forecast at just 1% over the next year, a new survey has predicted. Figures from the Chartered Institute of Personnel and Development (CIPD) revealed that despite falling unemployment, wage growth has remained weak because the supply of labour has gone up.

According to the data, for every low-skilled job, there were 24 applicants. Furthermore, there were also 19 candidates for every medium-skilled job, and eight for every high-skilled vacancy.

Author of the report, Gerwyn Davies, Senior Labour Market Adviser at the CIPD, said wages had been expected to rise along with employment. He added: “The facts remain that productivity levels are stagnant [and] public sector pay increases remain modest, while wage costs and uncertainty over access to the EU market have increased for some employers.”

Young adults ‘shunning cash payments in day-to-day spending’

Young adults are increasingly shunning cash payments in favour of cards and digital payments in their day-to-day lives, new figures have revealed. According to UK Finance, cash remains the most popular way to make payments overall, with 6% of the UK's adult population using notes and coins no more than once a month last year. This increased to more than 10% for 25 to 34-year-olds but dropped to 2% for 55 to 64-year-olds.

UK Finance revealed that individuals with a lower household income were more likely to mainly rely on cash compared to those with more affluent lifestyles. The data showed that more than half of all consumers who relied on cash during 2016 had a total household income of less than £15,000 per year.

Electricity switching jumps by 14%

The number of households that have opted to switch electricity supplier has risen by 14% this year alone, new figures have shown. According to statistics from Energy UK, the trade association for the energy industry, more than three million customers had already switched their electricity supplier by the end of July.

In July, 385,000 customers switched supplier, representing a 16% increase from July last year. Furthermore, one-in-five customers had signed up to small or medium-sized suppliers.

Lawrence Slade, Chief Executive of Energy UK, said that with over 50 suppliers to choose from, the market is becoming more innovative, driving “improvements to customer service and providing an incentive to keep prices competitive as suppliers fight to keep and attract customers".

Rail fares set to rise by up to 3.6%

UK rail users are facing a 3.6% increase in regulated rail fares from January 2018, new data has confirmed.

Train operators are permitted to raise fares by as much as the Retail Prices Index (RPI) figure for July, which currently stands at 5% - the highest since 2011. Data published on 15th August also revealed that the Consumer Prices Index (CPI) - the most widely watched and used figure - was unchanged at 2.6%.

Transport Focus, the body that represents the interests of rail passengers, said rail users were already unhappy with getting poor value for money. It said: “Passengers, especially commuters, face potential strike action, the consequences of the continual rise in passenger numbers, and disruption caused by railway upgrades."

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