- The labour market continues to recover, with employment, vacancies, and wages all increasing.
- Notwithstanding, the cost-of-living squeeze remains evident as real regular pay fell at its fastest 3-month average rate in over a decade.
- NIESR’s wage tracker predicts that average weekly earnings growth will grow at 7.8 per cent in the second quarter of 2022, after increasing by 7.0 per cent in the first quarter. The strong growth is underpinned by a combination of high bonus payments and increasing regular pay.
"The latest ONS estimates indicate the spending power of UK households is falling at its fastest rate in over two decades. When adjusted for inflation, average regular earnings were about 3 ½ per cent lower in April than a year earlier, whilst the most recent three-month average saw its worst decline in over a decade. The increase in regular pay of 4.2 per cent in April is dwarfed by the rate of inflation. The current situation is a timely reminder of the precarious situation faced by policy makers, particularly the MPC, who must try and bring inflation under control without plunging the economy into a recession.”
Dr Kemar Whyte
Senior Economist, NIESR