Workers face big squeeze on wages despite employment hitting almost 30million
STRUGGLING Brits face the tightest squeeze on real wages in generations despite more people in work and higher vacancies, gloomy economic stats revealed today.
The number of Brits on payrolls across the UK rose by 108,000 between December and January, the Office for National Statistics said.
It means close to 30 million are in work as the jobs market makes a continuing recovery.
A jump in employment rate, of 0.1% to 75.5%, meant the unemployment rate also reduced by 0.2% to 4.1% over the three months to December.
Meanwhile, total pay growth rose to 4.3% for the quarter to December - from 4.2% for the three months to November.
However, taking inflation into account - which is at its highest level since the early 1990s - real pay fell on the year by 0.1%. Wages excluding bonuses fell by 0.8%.
ONS head of economic statistics Sam Beckett warned: “Real total pay fell in the year to October-December 2021, despite a strong recovery in bonuses.”
Hannah Slaughter, senior economist at the Resolution Foundation, dubbed it the tightest real wage squeeze in generations," adding "the UK needs faster productivity growth.”
Labour said working people face a "fragile recovery in the face of a growing cost of living crisis and spiralling inflation".
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Recent reports on inflation showed numbers had soared to a near 30-year high of 5.4% back in December.
The new data only means more pressure is likely to be put on the Bank of England to increase interest rates more quickly.
Inflation is expected to reach 7% by spring and many workers will still be feeling the pinch from the cost of living crisis.
As the crisis continues, Brits have been battling rocketing energy bills, on top of soaring food costs, and tax increases, plus other bill rises to come too.
It means forking out of those wages to afford the rising costs.
Sarah Coles, senior personal finance analyst, Hargreaves Lansdown said: “There was a yawning gulf in the jobs market at the end of last year, with millions of people enjoying a comfortable Christmas of bumper bonuses or new jobs, and millions more facing a horrible struggle.
"On average, as long as inflation drops back later in the year, real wages are expected to recover.
"However, that average hides an enormous range of experiences, from those switching jobs for better pay to see them safely through the horrible squeeze this spring, to those who are already seeing their money stretched to breaking point, and still have more price hikes hanging over their heads.”
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