Wages are falling at the sharpest rate since records began as the cost of living crisis continues to squeeze bank balances, according to the latest official figures.
With inflation at a 40-year-high and energy bills expected to continue climbing – possibly up to £3,582 in October – these findings from the Office for National Statistics (ONS) add to the already bleak picture emerging for the UK economy.
Here’s what you need to know.
What’s happening to your wages?
While inflation soars to a 40-year-high at 9.4% (and is expected to peak at 11% within a few months), the ONS has found that workers’ pay is lagging significantly behind.
The ONS found that regular pay outside of bonuses grew by 4.7% between April and June.
This is a slight increase on the analysts’ predictions that wages would increase by 4.5%, but still a long way off the inflation rate.
It means that, overall, there was a 4.1% drop in regular pay for employees once this inflation rate is taken into account – the largest fall for workers since records started in 2001.
Darren Morgan, the director of economic statistics at the ONS said that it showed the “real value” of UK wages was still dropping.
What about employment rates?
It’s not entirely bad news – plenty of people are still in work.
The number of UK workers on payroll increased by 73,000 between June and July, up to 29.7 million.
Vacancy numbers were found to be at 1.274 million between May and July, a decrease of 19,800.
But, the unemployment rate rose slightly to 3.8% for the quarter compared to 3.7% for the previous period.
Morgan added: “The total number of hours worked each week to have stabilised very slightly below pre-pandemic levels. Redundancies are still at very low levels.
“However, although the number of job vacancies remains historically very high, it fell for the first time since the summer of 2020.”
In response, chancellor Nadhim Zahawi claimed that the stats show the jobs market “is in a strong position” as unemployment levels are so low. He also praised the “resilience of the UK economy” for creating new jobs.