There is a significant difference in how much wages have risen against the rising costs of food, energy and household goods according to official figures.
The Office for National Statistics (ONS) said despite higher wages, when compared against the high rise of inflation, pay had actually fallen 0.8 percent from the same period in 2020.
It found that employees’ regular pay grew by 3.7 percent between October and December when compared to a year earlier. This is high in comparison to pay rises over the past ten years, but still has not kept up with inflation.
The rising cost of food, energy and household goods has pushed
Inflation up by 5.4 percent in the 12 months to December 2021, due to rising costs of essentials and the Bank of England warns it could go up to 7 percent.
This is causing concern than workers will feel the pinch even more, but according to the ONS, employers are responding by putting salaries up faster.
Concerns about unemployment
The ONS said unemployment is now “only fractionally” above where it was before the pandemic. The unemployment rate fell to 4.1 percent, despite job vacancies hitting record high.
Other ONS figures show that this month (February) workers salaries were 10.3 percent higher than before the pandemic. However there is a record number of job vacancies at 1.3 million.
Director for people and skills at the CBI, Matthew Percival said: “The good news is that the UK economy is continuing to create jobs. The bad news is that businesses are struggling to hire and pay is failing to keep up with inflation.”