UK markets closed
  • FTSE 100

    7,208.81
    +188.36 (+2.68%)
     
  • FTSE 250

    19,123.71
    +430.73 (+2.30%)
     
  • AIM

    896.27
    +10.41 (+1.18%)
     
  • GBP/EUR

    1.1624
    -0.0022 (-0.19%)
     
  • GBP/USD

    1.2274
    +0.0013 (+0.11%)
     
  • BTC-GBP

    17,453.25
    +100.07 (+0.58%)
     
  • CMC Crypto 200

    462.12
    +8.22 (+1.81%)
     
  • S&P 500

    3,911.74
    +116.01 (+3.06%)
     
  • DOW

    31,500.68
    +823.32 (+2.68%)
     
  • CRUDE OIL

    107.06
    +2.79 (+2.68%)
     
  • GOLD FUTURES

    1,828.10
    -1.70 (-0.09%)
     
  • NIKKEI 225

    26,491.97
    +320.72 (+1.23%)
     
  • HANG SENG

    21,719.06
    +445.19 (+2.09%)
     
  • DAX

    13,118.13
    +205.54 (+1.59%)
     
  • CAC 40

    6,073.35
    +190.02 (+3.23%)
     

UK workers see pay lag behind inflation at record rate

·3-min read

Britons have seen rises in their pay packets fall behind soaring inflation at a record pace as the cost-of-living crisis tightens its grip on UK households, according to official figures.

The Office for National Statistics (ONS) revealed that regular wages excluding bonuses plunged by 4.5% in April when taking Consumer Prices Index (CPI) inflation into account – the biggest fall since records began in January 2001.

It comes as inflation has jumped to a 40-year high of 9% due to soaring energy and fuel bills amid the impact of the Ukraine war, and as economies emerge from the pandemic.

The ONS data showed that, in the three months to April, regular pay excluding bonuses fell 3% after the impact of inflation – the biggest fall since November 2011 – despite a 4.2% rise in average earnings.

But in a welcome dose of good news on the economy, the figures showed the number of UK workers on payrolls rose by another 90,000 or 0.3% between April and May to 29.6 million.

The unemployment rate edged up slightly to 3.8% in the three months to April, from 3.7% in the previous three months, though it remained close to 50-year lows.

Job vacancies also rose to a new record of 1.3 million despite a further slowdown in the rate of growth, while the redundancies rate to a new low of 2% in the three months to April.

ECONOMY Unemployment
UK unemployment rate (PA Graphics)

Chancellor Rishi Sunak insisted the statistics show Britain’s jobs market “remains robust with redundancies at an all-time low”.

But shadow work and pensions secretary Jonathan Ashworth said: “Work should be the best defence from the rising cost of living, yet millions in work are in poverty, real wages are plummeting, the numbers in overall employment are below pre-pandemic levels, and the numbers on out-of-work benefits not looking for work is higher than pre-pandemic.”

He also accused ministers of showing “utter complacency about the huge levels of economic inactivity”.

The ONS said those classed as economically inactive fell by 39,000 in the quarter, but remained high at 8.8 million, due mostly to older workers choosing to retire early throughout the pandemic, which has led to a shrinking labour market.

The jobs figures showed there were 47,000 fewer jobless Britons at 1.3 million in the quarter to March, while those in employment rose 177,000 to 32.7 million.

Sam Beckett, head of economic statistics at the ONS, said the figures “continue to show a mixed picture for the labour market”.

ECONOMY Unemployment
(PA Graphics)

She said: “While the number of people in employment is up again in the three months to April, the figure remains below pre-pandemic levels.

“Moreover, although the number of people neither in work nor looking for a job has fallen slightly in the latest period, that remains well up on where it was before Covid-19 struck.”

Martin Beck, chief economic adviser at the EY Item Club, said the latest resilient payroll and employment figures are likely to give the Bank of England the “green light” to raise interest rates once more when it meets on Thursday.

He said: “Higher borrowing costs will add to cost-of-living pressures facing households.

“But with unemployment so low and indicators of job security – as evidenced by vacancy numbers – high, the consumer sector isn’t out of supports yet.”

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting