Real average weekly earnings fell by 3 per cent in the three months to June, the biggest fall since 1977

Real average weekly earnings fell by 3 per cent in the three months to June, the biggest fall since 1977.

Regular pay grew by 4.7 per cent in the three months to June, while total pay including bonuses grew by 5.1 per cent.

There were 1.274 million job vacancies on average across May to July 2022, down 20,000 on the previous quarter.

This is the first quarterly fall since June to August 2020

Matthew Percival, CBI Director of Employment, said:

“It’s another month where pay falls further as businesses and workers struggle with rising costs like energy prices. Employers are doing their level best to support staff through this period, but the vast majority can’t afford large enough pay rises to keep up with inflation.

“Speaking to employers it’s clear that filling roles remains a primary concern and is proving a handbrake on the UK’s economic prospects.

“The number of older workers now economically inactive continues to worsen and it’s up to firms and Government to find new ways to attract people back into the labour market.

“The incoming government will need to add greater flexibility to the apprenticeship levy, review the Shortage Occupation List and aligning skills gaps with education and training.”

Nye Cominetti, Senior Economist at the Resolution Foundation, said:

“Near double-digit inflation has brought about the biggest pay squeeze in Britain since 1977 as pay packets shrink by around 3 per cent. 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.

“This squeeze has come about despite robust pay growth and a lively jobs market, with pay settlements strengthening slightly, and almost a million people moving jobs in the last three months.

“There is no evidence yet of big wage-price spirals, rising unemployment, or a major return to work brought about by falling household incomes. Whether these trends materialise in the months ahead will help determine the scale and distribution of the latest economic crisis.”

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