Workers have suffered a record real-term pay drop as prices soar, new figures have confirmed.
When inflation is taken into account, regular wages plunged an average of 4.1% on the year in the three months to June, the Office for National Statistics (ONS) revealed.
This is the biggest plunge in regular pay since the records began in 2001.
It comes after the rate of consumer price index CPI inflation hit a new 40-year record of 9.4% in June and is expected to peak at around 11% later this year.
Overall the figures revealed regular pay, excluding bonuses, grew by 4.7% over the three months to June - lagging significantly behind inflation.
Households across the UK have seen bills surge, with the latest forecasts from Auxilione warning the energy cap could top £5000 next year.
Darren Morgan, director of economic statistics at the ONS said the "real value" of pay was continuing to fall.
"Excluding bonuses, it is still dropping faster than at any time since comparable records began in 2001," he said.
After taking inflation into account, average pay including bonuses fell by 2.5% in the year to April to June 2022.
— Office for National Statistics (ONS) (@ONS) August 16, 2022
Excluding bonuses, it fell by 3.0% - the biggest fall since records began in 2001 https://t.co/OBmNjIDhoa pic.twitter.com/zjFkFr7lYX
Official figures also showed that the number of UK workers on payrolls rose by 73,000 between June and July to 29.7 million.
Meanwhile, the unemployment rate increased to 3.8% for the quarter compared with 3.7% for the previous period.
Mr Morgan added: “The number of people in work grew in the second quarter of 2022, whilst the headline rates of unemployment and of people neither working nor looking for a job were little changed.
“Meanwhile, the total number of hours worked each week appears to have stabilised very slightly below pre-pandemic levels.
“Redundancies are still at very low levels.
“However, although the number of job vacancies remains historically very high, it fell for the first time since the summer of 2020.”
Vacancy numbers hit 1.274 million over the three months from May to July, slipping by 19,800 in the first signal the UK’s hot labour market could be cooling.
Chancellor Nadhim Zahawi said: “Today’s stats demonstrate that the jobs market is in a strong position, with unemployment lower than at almost any point in the past 40 years – good news in what I know are difficult times for people.
“This highlights the resilience of the UK economy and the fantastic businesses who are creating new jobs across the country.”
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