Workers in the U.K. have suffered the biggest fall in their real pay for nearly nine years as the cost-of-living squeeze tightened, according to official figures released this morning
The Office of National Statistics says that Real wages fell by 1% between December 2021 and February 2022 and while they increased by 4%,when adjusted for inflation actually dropped compared with the year before.
There were however record job vacancies, which hit 1.3 million in January to March 2022.
The number of UK workers on payrolls rose by 35,000 between February and March to 29.6 million
Nye Cominetti, Senior Economist at the Resolution Foundation, said:
“Soaring inflation is casting a big shadow over an otherwise buoyant labour market. Vacancies are at record highs, while redundancies and unemployment are close to record lows.
“But while this positive news on the jobs front is leading to higher wages, it is not enough to prevent an already painful pay squeeze that will get worse in the months ahead.
“Everyone will be affected by the UK’s latest pay squeeze, which isn’t expected to end until late 2023. And with the current inflation being driven by soaring energy bills, it will be lower-incomes families feeling the squeeze the most.”
Eugenia Migliori, CBI Principal Policy Adviser, said:
“The UK economy continues to create jobs, but businesses are still struggling to hire and pay is failing to keep up with inflation. Persistent skills and labour shortages, alongside rising costs, is putting a strain on households and dampening business optimism for the months ahead.
“Addressing the skills challenges facing the country requires bold action. Replacing the apprenticeship levy for a new Skills Challenge Fund will allow firms to fund more high-quality training especially in areas of future demand. Acting now will help us meet the UK’s long-term skills need.”
