Wages not driving inflation but price surge denies millions a holiday

Europe

More than 38 million people in Europe can’t afford a week’s holiday despite being in work, according to an analysis by the European Trade Union Institute for the European Trade Union Confederation (ETUC). The ETUC argues that the cost-of-living crisis is putting holidays even further out of reach with the share of the total population who cannot afford a holiday increasing in over half of EU member states since 2019 and even the share of working people who can’t afford one has increased in 11 countries. Romania, Greece and Lithuania have the highest share of workers unable to get away for a week. Italy (8m) , Spain (4.6m) and France (4.1m) have the highest number of workers missing out on a break for financial reasons. Meanwhile, the ETUC notes that the European Commission has supported the view of trade unions that it is price rises, particularly for energy, that are the primary driver of inflation rather than wages. In its summer economic forecast, the Commission says both that “surging prices of energy remain the main inflation driver” and “a persistent feedback loop between wages and inflation is unlikely to develop” as real terms wage growth remained negative. This comes after the European Central Bank confirmed “many firms could expand their profits, often implying that consumers, rather than shareholders, have borne the brunt of the inflationary shock.”

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