Brit workers face pay cut as wage rises outpaced by inflation

In the final three months of 2021, hardworking Brits took an effective pay cut as ever increasing living costs overtook wage increases.

Figures from the Office for National Statistics said real wages fell once you adjust for inflation over the quarter.

It comes as people face mounting pressures from a cost-of-living crisis which is expected to worsen soon, with energy bills set to surge in April.

Total pay growth rose to 4.3% for the quarter to December – from 4.2% for the three months to November – but continued to lag behind inflation, which soared to a near 30-year high of 5.4% in December.

Meanwhile, Britain’s jobs market continued its recovery as the number of payrolled workers jumped last month but wages have continued to lag behind soaring inflation, according to official figures.

The Office for National Statistics said the number of UK workers on payrolls rose by 108,000 between December and January to 29.5 million.

The unemployment rate also reduced by 0.2 percentage points to 4.1% over the three months to December.

This was in line with the predictions from a consensus of analysts.

The UK employment rate increased by 0.1 percentage points on the quarter to 75.5%, while the number of people deemed economically inactive also increased slightly.

Sam Beckett, head of economic statistics at the ONS, said: “The number of employees on payrolls rose again in January 2022 and is now well above pre-pandemic levels.

“However, our Labour Force Survey shows the number of people in employment overall is well below where it was before Covid-19 hit.

“This is because there are now far fewer self-employed people.

“The survey also shows that unemployment has fallen again and is now only fractionally above where it was before the pandemic.”