Figures out this morning show that pay is failing to keep up with inflation, The Office for National Statistics revealed that the number of UK workers on payrolls rose by 71,000 between July and August to 29.7 million while unemployment fell by 0.2 per cent, its lowest level since 1974
Pay however has failed over the period to keep up with inflation.the real value of the average wage fell by 2.8 per cent in the month,having fallen by 3.0 in the previous month
Gregory Thwaites, Research Director at the Resolution Foundation, said:
“Pay settlements strengthened over the summer, but not by enough to keep up with rapidly rising inflation. As a result, pay packets have kept shrinking at close to their fastest rate since 1977. The only chink of light is that a more benign outlook for inflation means that they might not shrink any faster, although they won’t grow for another year.
“Wider economic turmoil also looks to be affecting the jobs market. Instead of the cost-of-living crisis tempting people back into work, more people are exiting the jobs market altogether, primarily due to poor health reasons.”
Ben Harrison, Director of the Work Foundation at Lancaster University, a leading think tank for improving work in the UK:
“Today’s figures are a reminder that the Government’s Energy Price Guarantee alone won’t end the cost of living crisis. Real wages are 2.8% lower on the year, and we are seeing a significantly widening gap between regular private sector pay growth (6.0%) and that in the public sector (2.0%).
“And although today’s data suggests unemployment is now at a record low at 3.6%, there will be anxiety for those workers in industries vulnerable to soaring energy prices as the six-month employer support package fails to provide longer term security. It is vital that when the Chancellor delivers his Budget in the coming weeks he provides more clarity on how these sectors can be supported, and how the Government intends to restore the UK economy to growth.”
