Workers '£89 a month worse off' than before crisis

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Workers in the private sector take home an average of £89 less per month today compared with the start of the financial crisis in 2008, figures show.

The study by Vocalink, which processes 90pc of UK salaries, reveals the extent of the decrease in spending power facing consumers over the past four years, amid high inflation.

Pay grew by just 0.4pc in the three months to December, down from 0.9pc the previous quarter when CPI (Other OTC: CPIC - news) inflation hit 2.7pc, the index showed. In December 2011, pay growth stood at 2.6pc, according to the analysis.

In 2012, workers took home £1,494 on average per month in real terms, compared with £1,583 per month in 2008, the FTSE 350 index showed.

David Yates, chief executive of Vocalink, said pay packets had failed to keep up with inflation for a significant period of time, highlighting the “constrained pay growth and consequent squeeze on household finances”.

“Inflation at present is a particular concern as we are seeing an increase in prices of essentials,” he said.

Douglas McWilliams, chief executive of the consultancy Centre for Economics and Business Research, said: “With energy prices scheduled to increase in December and January, inflation is now looking set to ramp up and remain elevated throughout much of 2013. As such, it could be some time before incomes regain spending strength.”