Real pay registers record fall


Following recent increases in inflation, real pay is now dropping faster than at any time since records began in 2001, says the Office for National Statistics. 


After peaking at 9.9%, the rate at which average “total pay” (including bonuses) has been growing dropped back to 3.9%. Without counting bonuses, “regular pay” is up by 4.6%. Both figures are way behind recent inflation rates (see column left). 


Public sector pay is lagging far behind on 1.9%, compared with private sector “regular pay” growth of 5.3%. Although also well short of inflation, the latest Pay Review Body-based awards (see page 25) may soon nudge up those public sector earnings figures.


The regular pay figures for Average Weekly Earnings are similar to the median level of pay settlements at 4.3%-4.9% (LRD Payline). However, we are now seeing a growing number of early or “interim” pay awards, especially one-off bonuses. 


Unemployment fell again (as did the number of “economically inactive” people) while there was another record low for redundancies. 


Overall employment, at almost 32.9 million, remains below its pre-pandemic level. But within that, payrolled employees increased by 31,000 to a record 29.6 million.