Record fall in UK pay as inflation hits 40-year high

Pay rises are still failing to keep up with inflation, according to the latest data from the Office for National Statistics (ONS).

New figures for March to May 2022 show that average pay including bonuses was down 0.9% when adjusted for inflation.

Excluding bonuses, average pay fell by 2.8% — the biggest fall since records began in 2001.

Average total pay growth in the private sector was much higher than in the public sector — at 7.2% for March to May compared to 1.5%, before taking account of inflation.

With fuel, energy and food costs soaring, inflation rose to a new 40-year high of 9.1% in May and is expected to reach 11% in the autumn.

Job vacancies have continued to increase, although the rate is slowing. There were 1.294 million job vacancies on average across April-June 2022, up by 6,900 on the previous quarter.

Between March and May, there were more vacancies than unemployed people, the ONS said.

The unemployment rate for the period was estimated at 3.8%, a fall of 0.1 percentage points compared to the previous three-month period.

Meanwhile, the employment rate increased by 0.4 percentage points to 75.9% but remains below pre-pandemic levels.

The number of UK workers on payrolls reached a record 29.6 million for June, an increase of 31,000 from May.