Latest wage estimates suggest cost-of-living squeeze is tightening

Main points

• Our wage tracker predicts that average weekly earnings growth will grow at 6.2 per cent in the second quarter of 2022, after increasing by 5.4 per cent in the three months to February.
• We forecast AWE for total pay in the private-sector to grow at 6.7 per cent in the second quarter of this year, with growth in regular pay expected to be largely unchanged.
• We continue to expect public-sector AWE growth to stabilise between 2 ½ and 3 per cent until the first quarter of 2022 and to reach around 3 ½ per cent going into the second quarter of the year.

"Latest ONS estimates suggest wage rises are running at around 5.4 per cent, but with inflation running at over 6.0 per cent, it is clearly not enough to keep up with prices. This confirms that the cost-of-living squeeze is tightening in the UK. The latest Labour Force Survey suggest the labour market is still tight, with unemployment down to 3.8 per cent and the employment rate largely unchanged from the previous three-month period. The imbalance between labour demand and supply mean vacancies remain at record highs, putting upward pressure on wage growth.”

Dr Kemar Whyte
Senior Economist, NIESR

See our previous wage tracker to follow the analysis