As the cost of living crisis grips the UK, the Office for National Statistics (ONS) has revealed that the country’s “real pay” has fallen by a staggering 3 per cent.
UK inflation is currently at a 40-year high, driven up by soaring prices, and has subsequently undercut the 4.7 per cent rise in wages. According to the BBC, the gap between inflation and wages is the biggest it has been since the record began over 20 years ago.
Darren Morgan, director of economic statistics at the ONS, said that the “real value” is continuing to fall.
“Excluding bonuses, it is still dropping faster than at any time since comparable records began in 2001,” he said.
The new data from ONS also suggests that the gap between public and private sector wages is also growing further apart, with the former experiencing a 1.8 per cent increase and private jobs receiving a 5.9 per cent increase.
This is, of course, part of a larger issue sweeping the UK. The cost of living crisis has prompted thousands to refuse to pay their energy bills, people are using candles to heat their homes, and MPs have been butting heads with union bosses.
“The only constant in 2022 is change and skyrocketing prices. Even with high wage growth and a tight labour market, workers are feeling the pinch as inflation emerges as the biggest winner,” Lauren Thomas from Glassdoor told CNBC. “With real wages falling a record 3.0 percent thanks to inflation, the cost of living is a priority for many job seekers,”
Nye Cominetti, a senior economist at the Resolution Foundation, said that the UK is witnessing the tightest pay squeeze since The Queen’s Silver Jubilee over 40 years ago in 1977.
“The scale of this pay pain is even deeper than official figures suggest too, as pay growth estimates are still artificially boosted by the effects of the furlough scheme last year,” he explained.
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