Pay rises could fall behind inflation by almost 8% later this year, marking the biggest fall in real wages for 100 years, according to analysis by the TUC.
The TUC said a prediction by the Bank of England that inflation would jump to 13% in the fourth quarter of this year at a time when wages were expected to increase by just 5.25% meant living standards would fall by an unprecedented 7.75%.
The TUC said that workers had not suffered such a severe and prolonged decline in wages relative to inflation since the 1920s.
The TUC said “Real pay has fallen by more on only one occasion, a decline of 13.3% in the fourth quarter of 1922 – as the post first world war pay and price inflation went sharply into reverse. The only other comparable figure was 7.2% in the first quarter of 1940.”
TUC general secretary, Frances O’Grady, said large businesses could accept lower profits by refusing to pass on all the higher costs they face.
O’Grady said: “...Too much goes into profits and to those who are already wealthy, and too little goes into wages and to working families. To change this, working people need stronger bargaining power to get a fair share of the wealth they produce..."