THE WAGE SQUEEZE
Average wages in Britain have fallen at the fastest rate since 2014 as annual pay growth fails to keep pace with rising inflation amid Britain’s cost of living crisis.
The Office for National Statistics said that annual growth in regular pay, excluding bonuses, fell by 1% in the three months to January after adjusting for its preferred measure of inflation – the biggest fall since July 2014.
Average total pay including bonuses rose slightly by 0.1% amid a bumper bonus season in the finance sector.
Frances O’Grady, the general secretary of the TUC, said, “Working people deserve financial security and a wage they can live on. But instead, they are facing the steepest decline in real pay for eight years, and a cost of living crisis that will get worse if the government doesn’t act now. Energy bills will rise at least 14 times faster than wages this year. Household budgets are already stretched to the brink and can’t take any more.”
“It doesn’t matter that a record number of people are now on UK payrolls or that there is still a record number of job vacancies, people in work are feeling the pinch and it’s going to get worse,” said Danni Hewson, a financial analyst at the stockbroker AJ Bell.
Nye Cominetti, a senior economist at the Resolution Foundation, said the pay squeeze was unlikely to end soon. “Overall surging inflation will wipe out any wage gains in 2022,” he said. “Britain’s real pay squeeze, which started as far back as summer 2021, will get deeper in 2022, and is unlikely to end until summer 2023.”
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