Uk workers suffer 2.9% hit to real wages amid high inflation

Uk workers

Average regular pay growth was 6.2% for the private sector and 2.2% for the public sector

UK workers saw regular pay grow 5.4% in the three months to August but ended up taking a 2.9% hit amid record high inflation, according to figures from the Office for National Statistics (ONS).

Growth in average total pay (including bonuses) was 6% and growth in regular pay (excluding bonuses) was 5.4% among employees in June to August 2022.

This is the strongest growth in regular pay seen outside of the coronavirus (COVID-19) pandemic period, the ONS said.

Average regular pay growth was 6.2% for the private sector and 2.2% for the public sector.

While growth in regular pay, excluding bonuses, was 5.4% on the year in the three months to August, this was trounced by inflation, which currently sits at a 40-year-high of 9.9%. It means real pay dropped 2.9% between June and August once inflation was factored in. Meanwhile, real total pay, which includes bonuses, fell 2.4% over the period, Alice Haine, personal finance analyst at Bestinvest, said.

The number of UK workers on payrolls rose by 69,000 between August and September to 29.7 million, according to figures from the Office for National Statistics (ONS).

The unemployment rate for June to August 2022 decreased by 0.3 percentage points on the quarter to 3.5%, the lowest rate since December to February 1974.

ONS head of labour market and household statistics David Freeman said: The unemployment rate continues to fall and is now at its lowest for almost 50 years.

However, the number of people neither working nor looking for work continues to rise, with those who say this is because they’re long-term sick reaching a record level, he said.

While the number of job vacancies remains high after its long period of rapid growth, it has now dropped back a little, with a number of employers telling us they’ve reduced recruitment due to a variety of economic pressures, he said.

However, because unemployment is also down, there continues to be more vacancies than unemployed people, he said.

The UK unemployment rate dropped unexpectedly to its lowest since 1974 as people dropped out of the workforce at a record rate. The figures show that 3.5% of adults were looking for work in the three months to the end of August, down from 3.6% the previous month and the lowest since 1974.

Chancellor Kwasi Kwarteng said: Countries around the world are facing economic challenges, but today’s statistics remind us that the fundamentals of the UK economy remain resilient, with unemployment at its lowest point for almost 50 years.

He said: Our ambitious Growth Plan will drive sustainable long term growth, meaning higher wages and better living standards for everyone, and we are cutting taxes so people can keep more of what they earn.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Getting Money Wise. The information provided on Getting Money Wise is intended for informational purposes only. Getting Money Wise is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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