Workers’ real pay drops for ninth month in row

Real wages have fallen as inflation soared (PA Wire)
Real wages have fallen as inflation soared (PA Wire)

Millions of workers saw their real wages drop for the ninth month in a row, official figures revealed on Tuesday.

According to the latest data from the Office for National Statistics, regular pay — which excludes bonuses — fell by 3.9 per cent in the three months to July as households were hit by soaring inflation which was 10.1 per cent in July.

Although the drop in real pay was slightly smaller than the 4.1 per cent fall recorded in the three months to June, the July numbers still showed one of the largest drops in real pay since comparable records began over 20 years ago. The three month average for real pay, which takes into account the benchmark CPI measure of inflation, has fallen every month since November 2021.

The ONS added that the gap between public and private sector pay is also the biggest it has ever seen.

However, with Chancellor Kwasi Kwarteng, right, preparing for a mini Budget, perhaps a week on Thursday, there was better news on unemployment. The jobless rate for May to July 2022 decreased by 0.2 percentage points to 3.6 per cent, the lowest rate since May to July 1974.

Official data yesterday showed that GDP was flat in the three months to July with the Bank of England forecasting that the country will slip into a recession later this year.

Ben Harrison, of the Work Foundation think-tank at Lancaster University, said: “Today’s figures are a reminder that the Government’s Energy Price Guarantee alone won’t end the cost-of-living crisis.”