This is the biggest squeeze on families since 1920s, warns Bank of England chief

Daily Mail
* Average salary rose by only 7.6 per cent since 2007
* Wages in 2011 set to be no higher than in 2005
* King: 'Bank of England can't wave a magic wand'
"Mr King said the wage squeeze is likely to continue this year, with inflation currently at 3.7 per cent but an average predicted pay rise of only 2.1 per cent.Speaking in Newcastle, he said: ‘As a result, in 2011 real wages are likely to be no higher than they were in 2005. One has to go back to the 1920s to find a time when real wages fell over a period of six years.’A ‘real wage’ is wages after inflation has been taken into account.Mr King piled on the gloom by declaring that the cost of living is set to keep on rising, making a situation which he described as ­‘uncomfortable’ even worse.The cost of living is ‘likely’ to rise by ‘somewhere between 4 per cent and 5 per cent’ over the next few months, although it will drop back next year, he said.This is far above the target set by the Government for inflation, measured by the consumer prices index, of 2 per cent."