British workers suffer biggest drop in regular pay since records began

Earnings fell by 2.8% between March and May this year relative to inflation, according to ONS data

The UK has been hit by rocketing inflation (Getty Images)

British workers have suffered the largest drop in regular pay since records began, with wages falling by nearly 3 per cent.

Earnings excluding bonuses fell by 2.8 per cent between March and May this year when inflation is taken into account, Office for National Statistics (ONS) data shows.

This was the biggest drop since records began two decades ago as the UK grapples with soaring inflation and a cost of living crisis.

Total pay - which includes bonuses - dropped in real terms by 0.9 per cent in the same period, according to the latest ONS assessment of average weekly earnings.

Before taking into account the rocketing price of goods and services, regular pay went up by 4.3 per cent and total pay by 6.2 per cent.

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

“Excluding bonuses, real pay is now dropping faster that at any time since records began in 2001.”

Consumer Price Index inflation hit a 40-year record of 9.1 per cent in May and is expected to reach as high as 11 per cent later this year.

Bills have surged as already soaring gas prices were compounded by the war in Ukraine.

Despite this, many have seen wages struggle to keep up.

Transport workers have been striking in a call for pay increases in the cost of living crisis, while unions have warned more strike action could follow if public sector workers wages do not match inflation.

Nadhim Zahawi, the newly appointed chancellor, said: “I am acutely aware that rising prices are affecting how far people’s hard-earned income goes, so we are providing help for households through cash grants and tax cuts.”

He also said the Treasury was working “alongside the Bank of England to bear down on inflation”.

Pat McFadden, Labour’s shadow chief secretary to the Treasury, said: “Today’s record fall in real wages comes after a decade where wages have stagnated for workers across the economy.

“This is because the Conservatives have failed to grow the economy, which has left people more exposed to inflation and the cost-of-living crisis.”

The ONS released other data on the UK’s labour market on Tuesday, showing the number of workers on payrolls rose by 31,000 between May and June.

Job vacancies continued to increase as unemployment fell, with major staff shortages in industries such as hospitality.

Julie Marson, a minister in the Department for Work and Pensions said it was “fantastic news” that the new ONS data also showed two million more women were in work compared to 2010.