LONDON (Independent) -- Real wages fell at a record rate between April and June as Britain’s cost-of-living crisis took hold and inflation slashed the value of workers’ pay, official figures show.
When the effect of rising prices is taken into account, pay including bonuses declined 2.5 percent in the latest quarter compared to a year earlier. Regular pay dropped 3 percent, the Office for National Statistics said.
Wages increased in cash terms but have been dwarfed by soaring costs for gas, electricity, fuel, food and other goods which have pushed the overall inflation rate to 9.4 percent.
Private sector workers saw their pay rise 5.9 percent before inflation - more than three times as fast as their counterparts in the public sector who received a 1.8 percent increase.
The figures set the government on course for further clashes with public servants including nurses, doctors, lawyers and teachers who have seen the value of their incomes collapse this year, adding to the pain of a decade of falling real wages.
Bonuses remained strong in June, the ONS said, with high-paid City workers seeing the strongest growth.
Separate figures showed the increasing strain on budgets, as the average household grocery bill increased by £533 in the past year, according to data company Kantar. The rate of food price increases rose to 11.4 percent in the four weeks to 7 August, compared with 9.9 percent in the previous month.
According to the Resolution Foundation think tank, the wage fall was the biggest since 1977, when the Queen was celebrating her Silver Jubilee.
Nye Cominetti, senior economist at the Resolution Foundation, said: “The scale of this pay pain is even deeper than official figures suggest too, as pay growth estimates are still artificially boosted by the effects of the furlough scheme last year.
“This squeeze has come about despite robust pay growth and a lively jobs market, with pay settlements strengthening
slightly, and almost a million people moving jobs in the last three months.
While wages fell, the number of UK workers on payrolls rose slightly, increasing 73,000 between June and July to 29.7 million, the ONS said.
There were also indications that fears of a looming recession had caused employers to hold back on hiring as the number of job vacancies fell back from an all-time high. Job openings dipped by 19,800 between May and July to 1,274,40 - the first quarterly fall since summer 2020.
The government is under growing pressure to announce more support for households faced with average energy bills of £3,600 by October when inflation is expected to hit 13.3 percent.
Boris Johnson has said no further measures will be announced until his successor as prime minister is announced next month.
Both candidates to replace him, Liz Truss and Rishi Sunak, have been urged to end their silence on the “national emergency” of energy costs after Labor vowed to freeze bills.
Jonathan Ashworth MP, Shadow Work and Pensions Secretary, responding to the latest ONS labor market statistics, said the latest figures provided “further proof” that the Tories have lost control of the economy.
“Because of the Tories’ failure on the economy, families face plummeting real wages and soaring energy bills. Yet, this Zombie Government is offering no solutions to the cost of living crisis.”
Liberal Democrat Treasury spokesperson Sarah Olney MP said: “Families are being hammered by a cost of living catastrophe and yet the Government is nowhere to be found.
“This zombie government has no plan and is failing our country. People can’t wait any longer for the Conservatives to play out their horror show leadership contest.”