Pay fails to keep up with rising prices at fastest rate since records began
Regular pay is falling at the fastest rate since records began when taking into account rising prices, according to the Office for National Statistics (ONS).
Between March and May, pay excluding bonuses was down 2.8% from a year earlier when adjusted for inflation, while pay including bonuses was down 0.9%.
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.
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.
Household budgets are being squeezed by rising food, fuel and energy costs.
The number of UK workers on payrolls rose by 31,000 between May and June to 29.6 million, the Office for National Statistics said.
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.
“Excluding bonuses, real pay is now dropping faster than at any time since records began in 2001.”