The Bank of England expects capitalists to increase their exploitation of workers in the next few months. It doesn't quite put things this way, but that's what it means when it says (pdf):

In the central projection, the recovery in productivity growth outstrips that in nominal wages for a period, meaning that growth in companies' costs falls back. That alleviation of cost pressures allows company margins slowly to be rebuilt.

You might wonder what it means by "rebuilt". Surely, the fact that real wages have fallen in the last 12 months means capitalists have already profited at workers' expense. What about all those stories of profiteering utilities' companies and suchlike?

Stop wondering. In fact, those workers who have kept their jobs have done quite well at capitalists' expense.

My chart shows the point. It shows the own product real wage. This is wages (defined as total compensation per hour) divided by the product of GDP per hour and the GDP deflator.

The idea here is that workers can gain at capitalists' expense if their wages rise relative to either prices or productivity; if our pay rises without us being more productive, we've won and capitalists have lost.

And this is just what's happened. Since 2008, productivity has fallen but real wages have fallen less. The OPRW has thus risen.

Real wages have fallen recently not because capitalists have become even more evil and exploitative, but because productivity has fallen. The economic pie has shrunk. Labour's share of it has held up well.

The Bank of England is predicting a reversal of this. This is not unusual. The OPRW fell during the recoveries of the early 80s and 90s, precisely because productivity rose faster than real wages.

Herein, though, lies a problem. Real wages (average earnings divided by CPI) are lower now than they were in 2005. If the Bank's forecasts are roughly right, they won't recover much soon. This could mean an entire decade or more of falling real incomes for many households. Will this be politically palatable if profits are seen to be rising? Might it not increase demands for tax cuts to restore living standards?

The political implications of the Bank's forecasts could be significant.