UK workers saw their pay fall behind sky-high inflation, despite another steep hike in earnings, as the cost-of-living crisis hit hard.
The Office for National Statistics (ONS) stated that regular pay, excluding bonuses, grew by 5.2% over the three months to July.
But, with Consumer Prices Index (CPI) inflation taken into account, real pay fell by 3.9% year-on-year.
It comes after CPI inflation jumped to a fresh 40-year high of 10.1% in July as energy and food bills sent living costs racing higher.
The UK Government’s move to freeze energy bills at £2,500 is set to rein in the peak in inflation, but wages are still unlikely to keep pace with rising costs.
The ONS added that total pay including bonuses lifted by 5.5% for the three-month period, falling by 3.6% with inflation taken into account.
Pressure on wages came as official figures showed that the number of UK workers on payrolls rose by 71,000 or 0.2%, between July and August to 29.7 million, the ONS said.
Kevin Brown, PR manager at Scottish Friendly, commented: “On the face of it, the UK labour market is in good shape with unemployment falling to a 48-year low of 3.6% and the number of payrolled employees rising by 2.8% year-on-year in August.
“But that doesn’t tell the whole story as nearly 22% of UK adults aged 16 to 64 are economically inactive and not part of the labour force, higher than before the pandemic.
“Meanwhile, workers are facing the biggest wage squeeze for more than 20 years when comparable records began - adjusted for inflation, growth in real pay fell by -2.8% in the three months to July, which is just shy of the record -3% drop reported last month.”
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