Wages in the UK are falling at the fastest pace in more than a decade | Pay

Average wages in the UK are falling at the fastest pace in more than a decade as annual wage growth fails to keep pace with rising living costs.

The National Statistics Office said annual growth in regular pay, excluding bonuses, fell 2.2% in the three months to April after adjusting for its preferred inflation measure, the biggest drop since November 2011.

Average total pay, including bonuses, rose slightly by 0.4% due to the boom in payments in the financial sector.

British households are facing intense tensions in living standards as income growth fails to keep pace with rising energy bills and rising weekly store spending, with inflation peaking since the early 1980s.

However, workers in some sectors, mainly the private sector in finance, IT and business services, are benefiting from stronger wage growth amid the lowest unemployment rates in 50 years and record vacancies.

The ONS said the sharp rise in city bonuses helped boost the average total wage – including bonuses across the economy – to 6.8% in the three months to April, before inflation. The average regular salary, excluding bonuses, increased by 4.2% before inflation.

Emphasizing the uneven impact of the cost of living crisis, amid the threat of strikes in the railways and other industries amid fierce wage disputes, the average wage in the public sector has risen by only 1.5%, compared to 8% in the private sector.

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Analysts say tight labor market conditions are helping boost wage growth before inflation is taken into account, with recent data revealing a new increase in the number of job vacancies in the economy to a new record high of 1.3 million.

Unemployment rose slightly to 3.8% a month from 3.7% in March, although it remained among the lowest levels since the 1970s.

Rishi Sunak said the figures show that the labor market remains stable with cuts to a minimum. “Helping people work is the best way to support families in the long run, and we continue to support people in new and better jobs,” he added.