Real wages fall at fastest pace on record amid Britain’s inflation crisis

Real wages have suffered their biggest drop on record in Britain when adjusted for inflation, the Office for National Statistics revealed on Tuesday.

Regular pay, which excludes additional forms of pay, such as bonuses, fell an average of 3.7% in real terms in the three months to May, the biggest drop since these records began. in 2001, the ONS said. While real wages fell slightly more slowly in May than in April, by 3.9% and 4.5% respectively, it was even worse than at any other time on record.

While regular wages actually rose 4.3% in the three months to May, this was however wiped out by the rising cost of living.

Inflation also hit a new 40-year high in May, at 9.1%, with forecasts calling for further increases in the fall, when the cap on energy prices is expected to be lifted again. Indeed, while wages have risen, the cost of the things people need to buy to live has risen so much by the end of the period that the situation has effectively deteriorated.

“Following recent increases in inflation, wages are now clearly falling in real terms, including and excluding bonuses,” said David Freeman, head of labor market and household statistics at the ONS.

Meanwhile, grocery inflation has also hit its highest level since the 2008 financial crisis, with food inflation hitting 9.9% this month. In real terms, the average family can now expect to pay £454 more a year in the supermarket, with the cost of milk, butter and animal feed seeing the steepest increases.

The latest increase in supermarket inflation was boosted by budget suppliers such as Lidl and Aldi raising prices by more than 11%. The Guardian reported.

The head of retail and consumer insights at analytics firm Kantar said: “Grocery prices continue to climb to near-record highs and jumped a further 1.6 points. percentage since last month. This is the second highest level of grocery inflation we’ve seen since we started tracking prices this way in 2008 and we’re likely to top the previous peak in August.

“All of this means people will feel the pinch in our first unrestricted summer since 2019. Taking a barbecue as an example, buying burgers, halloumi and coleslaw for some outdoor dining would cost you 13%, 17% and 14% more than it would have done at this time last year.

Follow Kurt Zindulka on Twitter here @KurtZindulka


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