UK markets close in 8 hours 15 minutes
  • FTSE 100

    7,479.43
    +13.52 (+0.18%)
     
  • FTSE 250

    20,229.17
    -16.26 (-0.08%)
     
  • AIM

    927.64
    -0.72 (-0.08%)
     
  • GBP/EUR

    1.1826
    +0.0008 (+0.07%)
     
  • GBP/USD

    1.2204
    +0.0002 (+0.01%)
     
  • BTC-GBP

    19,641.68
    -569.60 (-2.82%)
     
  • CMC Crypto 200

    569.31
    -5.44 (-0.95%)
     
  • S&P 500

    4,207.27
    -2.97 (-0.07%)
     
  • DOW

    33,336.67
    +27.16 (+0.08%)
     
  • CRUDE OIL

    94.22
    -0.12 (-0.13%)
     
  • GOLD FUTURES

    1,807.90
    +0.70 (+0.04%)
     
  • NIKKEI 225

    28,546.98
    +727.65 (+2.62%)
     
  • HANG SENG

    20,136.70
    +54.27 (+0.27%)
     
  • DAX

    13,694.51
    -6.42 (-0.05%)
     
  • CAC 40

    6,553.23
    +8.56 (+0.13%)
     

Workers see wages lag behind inflation at 20-year low

·2-min read

Britons saw their pay packets continue to lag heavily behind inflation despite a slight rise in earnings.

The Office for National Statistics (ONS) revealed that regular wages excluding bonuses plunged by 3.7% over the three months to May against the rate of consumer price index (CPI) inflation, representing the biggest slump in more than 20 years.

Regular pay, excluding bonuses, rose slightly to 4.3% for the period without taking inflation into account.

ECONOMY Unemployment
(PA Graphics)

It comes after CPI inflation hit a 40-year record of 9.1% in May and is expected to reach as high as 11% later this year.

Bills have surged due to soaring energy and fuel bills amid the impact of the Ukraine war, but many have seen wages struggle to keep up.

The ONS added that total pay including bonuses lifted by 6.2% for the three-month period, as workers in the financial sector drove a rise in bonuses.

Pressure on wages came as official figures showed that the number of UK workers on payrolls rose by 31,000 between May and June to 29.6 million.

Meanwhile, the rate of unemployment decreased to 3.8% for the three-month period.

Annual change in inflation-adjusted pay
(PA Graphics)

Unemployment fell as job vacancies also continued to increase, with major staff shortages in industries such as hospitality.

There were 1,294,000 job vacancies over the three months to June, representing a 6,900 rise on the previous quarter.

ONS head of labour market and household statistics David Freeman said: “Today’s figures continue to suggest a mixed picture for the labour market.

“The number of people in employment remains below pre-pandemic levels and, while the number of people neither working nor looking for a job is now falling, it remains well up on where it was before Covid-19 struck.

“With demand for labour clearly still very high, unemployment fell again, employment rose and there was another record low for redundancies.

“Following recent increases in inflation, pay is now clearly falling in real terms, both including and excluding bonuses.”

Chancellor Nadhim Zahawi said: “I am acutely aware that rising prices are affecting how far people’s hard-earned income goes, so we are providing help for households through cash grants and tax cuts.

“We’re working alongside the Bank of England to bear down on inflation, providing support worth £37 billion this financial year for the cost of living, and investing in skills to help people get into work and progress.”

Labour’s Pat McFadden, shadow chief secretary to the Treasury, said: “Today’s record fall in real wages comes after a decade where wages have stagnated for workers across the economy.

“This is because the Conservatives have failed to grow the economy, which has left people more exposed to inflation and the cost-of-living crisis.

“Labour’s number one mission in government would be to grow our economy, making the country more prosperous and making its people better off.”

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