Record wage rises still outpaced by soaring inflation
Wages are rising at their fastest rate in more than 20 years, but still lag well behind the soaring cost of living.
Regular pay rose by 5.7% in the year to September, the fastest growth since 2000 excluding the pandemic, when people got big rises returning to work from furlough.
However, when adjusted for rising prices, wages fell by 2.7%.
The cost of living is currently rising at its fastest rate in almost 40 years, in part due to the war in Ukraine.
Energy and food prices have shot upward, leaving many people struggling to pay their bills.
The UK unemployment rate rose slightly to 3.6% in the three months to September, up from 3.5% in August, official figures show.
However, while this is near a 50-year low, the Bank of England has warned that unemployment will nearly double by 2025 as the UK goes through a tough recession.
On Thursday, Chancellor Jeremy Hunt will set out his plans to get the economy back on track, with spending cuts and tax rises expected.
Commenting on the latest figures, Mr Hunt said he understood that “people’s hard-earned money isn’t going as far as it should”.
“Tackling inflation is my absolute priority and that guides the difficult decisions on tax and spending we will make on Thursday.”
But Labour’s shadow chancellor, Rachel Reeves, said the UK was paying for “12 years of Tory economic mistakes”.
“Real wages have fallen again, thousands of over-50s have left the labour market and a record number of people are out of work because they’re stuck on NHS waiting lists or they’re not getting proper employment support.”
The Office for National Statistics (ONS) said the number of people in employment in the UK fell by 52,000 between July and September.
Older workers continued to leave the labour market, with the number of people classed as long-term sick increasing to a fresh record.
However, there was also a rise in younger people not working, possibly due to the wave of strikes seen in recent months.
“August and September saw well over half a million working days lost to strikes, the highest two-month total in more than a decade, with the vast majority coming from the transport and communications sectors,” said Darren Morgan, director of labour and economic statistics at the ONS.
“With real earnings continuing to fall, it’s not surprising that employers we survey are telling us most disputes are about pay.”
