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The UK’s cost of living squeeze has tightened, with basic pay falling behind inflation at the fastest rate in over seven years.
The latest jobs figures, just released, show that regular real pay (adjusted for inflation) fell by 1% year-on-year in the three months to January. That’s the biggest fall in real regular pay since May to July 2014 (it also fell 0.9% early in the pandemic).
Total pay rose just 0.1% in real terms, due to strong bonus payments over the past six months.
Wages did rise in nominal terms: total pay (including bonuses) grew 4.8%, while regular pay (excluding bonuses) was 3.8% in November-January 2022.
But those pay increases were eroded by rising prices — CPIH inflation (the ONS’s preferred inflation measure) averaged 4.8% in the quarter.
And the squeeze will continue in the coming months, as higher energy and food prices push up the cost of living. Consumer inflation is expected to jump over 7% by April.
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