Wage Growth Not Keeping Up With Inflation as Real Regular Pay Growth Falls by a Record Amount

Main points

• NIESR’s wage tracker now predicts that average weekly earnings growth will grow at 4.6 per cent in the second quarter of 2022, after increasing by 7.0 per cent in the first quarter. Our early prediction for the third quarter is for average weekly earnings growth to maintain its current rate of around 4 1⁄2 per cent.
• Total pay growth of 7.2 per cent in private sector was nearly five times the rate seen in the public sector.
• The unemployment rate has fallen again, and more people are in work. More generally, the labour market remains extremely tight with the number of vacancies just shy of 1.3 million across April to June 2022.
• Today’s ONS estimates indicate that economic inactivity is easing, suggesting that the cost-of-living squeeze is beginning to force people back into the labour market.
• Real regular wages in the UK fell by 2.8%, a record fall.