UK Wage Growth Continues to be Outstripped by Soaring Inflation

Main points

• The latest ONS estimates suggest the annual growth rate of average weekly earnings was 5.1 per cent in the second quarter of 2022, marginally higher than our tracker predicted last month.
• Today’s estimates also suggest that real regular pay in the UK fell by 3.0 per cent, a record fall.
• NIESR’s wage tracker now predicts that average weekly earnings will grow at 6.1 per cent in the third quarter of this year.
• The unemployment rate held at 3.8 per cent in the second quarter, but there were signs of a slowdown in hiring as the number of job vacancies fell for the first time since August 2020.
• The labour market figures indicate that the weakening economy is leading to a slightly less tight labour market.

“Today’s ONS estimates indicate real regular wages have fallen by a record 3.0 per cent on the year. Including bonuses, growth in average earnings, which was 5.1 per cent, failed to keep pace with the soaring cost-of-living as households continue to take hits from surging energy bills and higher food and fuel costs. The figures today also point to a marked difference between public and private sector wage growth, with private sector wages growing by 5.9 per cent while workers in the public sector saw pay growth of 1.8 per cent.”

Dr Kemar Whyte
Principal Economist, NIESR

See our previous wage tracker to follow our analysis 

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