More working days were lost to strike action last year than at any time since 1989, according to official figures that also show wage growth failed to keep pace with inflation amid the biggest real-terms fall on record.
The figures from the Office for National Statistics provide more evidence for the squeeze on households amid the cost of living crisis.
The ONS said 843,000 working days were lost in December, the highest monthly figure for more than a decade, with widespread strikes across numerous sectors, including NHS, rail and Royal Mail workers, and civil servants working for Border Force and as driving instructors
With widespread disputes across the country after a decade of weak wage growth, and inflation at its highest level in 40 years, more than 2.4m working days were lost over 2022 as a whole – the highest annual figure since 4.1m days were lost in 1989 at the tail end of Margaret Thatcher’s government.
Official figures also show that real-terms pay, excluding bonuses, fell by 3.6% in the three months to December, among the largest falls since comparable records began in 2001.
Paul Nowak, the general secretary of the TUC, said that instead of recognising the huge pressure households were under, the government had chosen to make millions poorer by holding down public sector pay. “It is little surprise that workers are having to take strike action to defend their living standards. They have been pushed to breaking point.”
Without adjusting for inflation, annual growth in regular pay for all workers, excluding bonuses, strengthened to 6.7% over the three months to December. It was the fastest growth since 2001 – excluding the pandemic, when official pay figures were distorted by the furlough scheme – but still well below the current headline inflation rate in the UK of 10.5%.
Strong wage growth for City bankers and accountants helped to drive up private sector pay growth, before adjusting for inflation, to 7.3%, as wages in the public sector continued to trail significantly behind with a growth rate of 4.2%.
While the number of people in the workforce rose, zero hours contracts also hit a record high of 1.13m.
ONS data shows a record high net flow of people moving from economic inactivity and into employment. This was driven largely by younger people and students, and older people aged 50 to 64, for whom inactivity dropped the most.
The figures were released as the government comes under mounting pressure to increase public sector pay as industrial action continues, with a renewed wave of strikes expected to sweep the UK over the coming months.
Jeremy Hunt, the chancellor, said Britain’s low levels of unemployment were an “encouraging sign of resilience” in the jobs market. “The best thing we can do to make people’s wages go further is stick to our plan to halve inflation this year.”
The latest snapshot showed more people returned to the labour market altogether at the end of 2022, with some people moving straight back into a job and others starting to seek work again. The ONS said this meant that although employment rose again, unemployment edged up also.
Unemployment rose to 3.7%, close to the lowest level in almost 50 years. However, job vacancies fell for a seventh consecutive quarter as a slowdown in the economy weighed on hiring demand, despite the number of openings sticking at historically high levels at more than 1.1m.
Rachel Reeves, the shadow chancellor, said: “Britain has huge potential but 13 years of the Tories has left real wages down, families worse off, and our economy lagging behind on the global stage. The government needs to stop sitting back and following this path of managed decline.”
The figures came as the Bank of England considered whether further interest rate increases are warranted after 10 successive rises in the cost of borrowing, taking the base rate to 4%, the highest level since the 2008 financial crisis.
City analysts expect the central bank to use next month’s meeting of its monetary policy committee to launch a further 0.25 percentage point increase, amid concern that a resilient labour market with robust wage growth could fuel persistent inflationary pressure.
However, some economists said there were signs of the jobs market cooling as Britain’s economy struggles for growth momentum.
The Resolution Foundation said rising unemployment, falling vacancies and an increase in the number of hours people wanted to work reflected a slowdown in demand across the economy.
Nye Cominetti, a senior economist at the thinktank, said: “The labour market is sending a tentative signal to policymakers, with evidence of cooling in the jobs market and extra labour supply alongside early evidence of slowing pay growth.
“The fall in economic inactivity since the summer is welcome, though the accompanying rise in zero-hours contracts less so. And the bigger picture is a stark real wage squeeze that is prompting ever more industrial action.”
