Regular wages, excluding bonuses, fell by an average of 4.1% year-on-year in the three months to June when inflation is taken into account, according to the Office for National Statistics (ONS). It’s the steepest drop since records began more than two decades ago and the ninth straight month-on-month drop in real earnings, the data show. It comes after the pace of consumer price index (CPI) inflation hit a 40-year record of 9.4% in June and is expected to reach 11% later this year. Bills have risen due to soaring energy and fuel bills amid the fallout from the war in Ukraine, but many have seen wages struggle to keep up. The squeeze on real wages will increase pressure on the government to take further action to tackle the cost of living crisis. Excluding inflation, regular pay, excluding bonuses, rose 4.7% in the three months to June. With bonuses, total pay increased by 5.1%. There was a significant difference between the public and private sectors. Public sector workers, many of whom voted to strike over below-inflation pay offers, saw their overall wages rise just 1.8%, compared to 5.9% in the private sector. The figures also showed that the number of UK payroll workers rose by 73,000 between June and July to 29.7 million. Meanwhile, the unemployment rate rose to 3.8% in the quarter from 3.7% in the previous period. ONS director of economic statistics Darren Morgan said: “The number of people in work rose in the second quarter of 2022, while the nominal rates of unemployment and those neither working nor looking for work were little changed. “Meanwhile, the total number of hours worked each week appears to have stabilized very slightly below pre-pandemic levels. “Layoffs are still at very low levels. “However, although the number of job vacancies remains historically very high, it has declined for the first time since summer 2020.” Read more: What is causing energy prices to rise? Nationwide offers 11,000 workers £1,200 bonus to help with bills Families massively underestimate how much energy bills will rise Chancellor Nadhim Zahawi said: “Today’s statistics show that the labor market is in a strong position, with unemployment lower than at almost any time in the last 40 years – good news in what I know are difficult times for people. “This highlights the resilience of the UK economy and the fantastic businesses that are creating new jobs across the country.” Subscribe to the Daily Podcast on Apple Podcasts, Google Podcasts, Spotify, Spreaker He added: “While there are no easy solutions to the cost of living pressures people are facing, we are providing help where we can. “We are delivering a £37bn household help package through cash grants and tax cuts so people can keep more of what they earn. “And while we cannot fully protect everyone from these global economic shocks, we are targeting this support to millions of the most vulnerable people in our society: those on the lowest incomes, pensioners and people with disabilities.”
