According to recent figures from the Office for National Statistics (ONS), real average weekly earnings dropped in November for the first time since July 2020, with basic pay without bonuses growing by 3.8% in the quarter to November. Average total pay including bonuses rose by 4.2%.
Meanwhile, consumer price inflation (CPI) jumped to 5.1% in November and is expected to reach as high as 6% in the spring as energy bills increase. Allowing for inflation, total pay was up by only 0.4%, while regular pay stayed level.
From September to November, the average total pay growth for the private sector was 4.5%, but for the public sector, this figure came in at just 2.6%.
“Inflation has waged war on pay and in November, salaries actually slid once inflation was taken into account. This has piled on the pressure for those struggling through the cost of living crisis, and things are going to get even worse,” said Sarah Coles, senior personal finance analyst at Hargreaves Lansdown.
“Wage rises have been falling steadily since spring 2021. Annual rises peaked at this point at 7.3% for regular pay and 8.8% for total pay, thanks to the fact that during the previous spring, wages had plummeted during the first lockdown. Meanwhile, inflation has ramped up from below 1% in February 2021 to more than 5% nine months later. In November, with inflation at 5.1%, it overtook wages.”