POLITICS

Real wages are falling at fastest rate in 20 years

Real pay dropped by 2.8 per cent between March and May, compared with the same quarter in the previous year
Real pay dropped by 2.8 per cent between March and May, compared with the same quarter in the previous year
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High inflation has driven down real pay by the highest rate in more than 20 years as earnings fail to keep pace with price rises, official figures show.

Real pay, after adjusting for inflation, dropped by 2.8 per cent between March and May, compared with the same quarter in the previous year. It is the seventh consecutive month of decline.

The fall is the fastest since comparable records began in 2001, and comes despite a tight labour market with low unemployment and high job vacancies. In normal circumstances economists expect employers to have to increase salaries to attract staff.

The Office for National Statistics data showed that even workers who received bonuses began to feel the pinch in the second quarter as real pay including