British workers have seen a substantial drop in wages at the fastest rate on record, official statistics reveal.
Regular wages (excluding bonuses) rose slightly by 4.3% in the three months to May, according to data released by the National Bureau of Statistics (ONS) on July 19.
However, inflation-adjusted real wages plummeted 2.8%, the largest decline since data recording began in March 2001.
Average gross salary (including bonuses) increased by 6.2%. However, after adjusting for inflation, average total wages fell by 0.9%.
Inflation in the UK, measured by the Consumer Price Index (CPI), hit a 40-year record of 9.1% in May and is expected to reach 11% later this year.
“Wages, with or without bonuses, have fallen substantially clearly following the recent rise in inflation,” said David Freeman, head of labor market and household statistics at ONS. “.
Meanwhile, retail research firm Canter revealed that food price inflation jumped to 9.9% in the four weeks leading up to July 10, rising sharply from 8.3% last month.
Researchers say prices for products such as dog food, butter, and milk have risen most rapidly.
Supply chain issues and labor pressures have been added to the cost of food production and are now being fed back to shoppers.
Fraser McKevitt, head of retail and consumer insights at Kantar, said he expects to exceed the overall record of food inflation in August.
“Taking barbecue as an example, buying burgers, halloumi, and coleslaw for outdoor dining is 13 percent, 17 percent, and 14 percent higher than this time last year,” he said.
Further rising inflation
The newly appointed Prime Minister Nadim Zahawi has promised to bring inflation back to control, and the Bank of England has also insisted that the consumer price index return to its target of 2%.
Banks are trying to curb inflation by raising interest rates to 1.25% at each of the last five meetings.
But experts believe inflation will rise even further.
Investec Economics economist Erie Henderson said the driving force behind high inflation was rising fuel prices.
Also, given the ongoing war in Ukraine, “Given the UK’s reliance on imported food, it could be exacerbated by weak sterling and high food price inflation could continue in June. It ’s expensive. ”
PA Media contributed to this report.