For the second month in a row, wages have fallen sharply as the cost of living has accelerated.
Statistics from the Office for National Statistics (ONS) show that regular pay, excluding wages, rose 4% in February.
Wage growth accelerated to 3.8% in January but failed to keep pace with rapid inflation. Prices rose 5.5% in January and inflation reached 6.2% in February.
ONS says wages excluding bonuses fell 1% in February, down from 1% in January. Salary including bonus increased by 0.4%.
The crisis of life is only set to intensify: today’s ONS data does not capture the cap on energy price increases this month, nor the effects of the supply chain disruption and rising oil and gas prices due to Russia’s invasion of Ukraine.
The Bank of England expects inflation to rise above 8% by the end of this year, and some cities predict that 10% inflation may be possible.
Today’s pay data could put even more pressure on the Chancellor to help low-income families cope with the cost crisis. The PWC estimates that the UK’s lowest earners have experienced a য়ের 1,300 income decline this year as energy and food costs have risen.
ONS data show that unemployment fell again to 3.8% in February, down from 3.9%.
Mims Davis MP, Minister for Employment, said: “Behind these ONS statistics we know that this is a difficult time for many workers and families.
“We’re doing everything we can with our Way to Work scheme, which is helping people who come through the door of our job center move to better-paying, higher-skilled jobs. In addition, more than 22 22 billion in investment has been backed up by the National Living and Minimum Wage growth targets. ”
Commenting on the announcement, Eugenia Migliori, the CBI’s chief policy adviser, said: “The UK economy continues to create jobs, but businesses are still struggling to find employment and are failing to keep pace with wage inflation. Continued skills and labor shortages, along with rising costs, are putting pressure on families and reducing business optimism for months ahead.
“The country needs bold steps to meet the challenge of efficiency. Replacing the apprenticeship fee for a new Skills Challenge Fund will allow firms to finance more high-quality training, especially in future needs. Now acting will help us meet the UK’s long-term skills needs. “
Also commenting on the announcement, Kieran Boyle, MD of Gloucester-based CKB Recruitment, said: “There is a huge efficiency gap in the job market. This is easily the most candidate-driven market we have ever experienced. The battle for talent is won by companies that have embraced flexibility, because people now want it as a rule. Companies that are stuck trying to get everyone in the office five days a week are really struggling to attract the best talent, as well as retain it. Post-epidemic lifestyle changes have seen the number of people already employed go through the roof elsewhere. “