British workers suffered the biggest fall in their real pay for nearly nine years as a result of the rising cost of living, official figures show.
According to the latest data released by the Office for National Statistics (ONS) on April 12, regular pay excluding bonuses tumbled 1.8 percent in the three months to February 2022 when inflation is taken into account, as measured by the Consumer Prices Index (CPI). It was the steepest fall since August to October 2013.
Figures for February alone show regular wages dropped 2.1 percent after inflation, which was the biggest drop since August 2013.
While pay rose 4 percent in the quarter, it was far outstripped by soaring inflation.
Darren Morgan, director of economic statistics at ONS, said: “While strong bonuses continue to mitigate the effects of rising prices on people’s total earnings, basic pay is now falling noticeably in real terms.”
The situation is set to worsen further after April’s energy cap rise, council tax bills increase, and the national insurance contribution rise.
Inflation has already reached 6.2 percent and is expected to peak at nearly 9 percent this autumn.
The UK’s economic forecasters, the Office for Budget Responsibility (OBR), recently warned that households will suffer the biggest fall in real incomes since records began in 1956, with a drop of more than 2.2 percent this year.
Commenting on the latest figures, Chancellor Rishi Sunak said: “We are helping to cushion the impacts of global price rises through over £22 billion ($28.6 billion) of support for the cost of living this financial year.
“We’re also helping people to find new jobs and ensuring work always pays, as this is the best way to support households in the longer term.”
But the main opposition Labour party accused the Conservative government of “leaving real wages squeezed and people worse off.”
Pat McFadden, Labour’s shadow chief secretary to the Treasury, said Sunak had “decided to make Britain the only major economy to land working people with higher taxes in the midst of a cost-of-living crisis.”
But Darren Morgan at ONS said it was partly due to “rising numbers of people disengaging from the labour market, and as they aren’t working or looking for work, are not counted as unemployed.”
