New figures from the Office for National Statistics (ONS) show regular pay fell by 1.2 per cent in January to March 2022.
Between March 2020 and March 2021, average monthly pay fell by £68.
Inflation soared to 7 per cent in March.
Last week the Bank of England said inflation could rise to 10 per cent by the end of 2022, and that a recession could be ahead.
The ONS’ director of economic statistics, Darren Morgan, has described the labour market as a “mixed picture”, following today’s news.
While unemployment has fallen, real earnings are “now falling sharply in real terms” he said via Twitter.
Chancellor Rishi Sunak implied that while the statistics are unfortunate, the government has been ramping up support, however he failed to announce any fresh measures, stating: “The unprecedented support we provided through our Plan for Jobs has led to the jobs market remaining robust despite global challenges, with the unemployment rate near record-lows and the number of payrolled employees at a record high.
“I understand that these are anxious times for people, but it’s reassuring that fewer people are out of work than was previously feared, and we are helping them to keep more of their hard-earned money through tax cuts, changes to Universal Credit and support with household bills worth £22 billion this financial year.”
Labour’s shadow secretary of state for work and pensions, Jonathan Ashworth, has reiterated calls for an emergency budget this morning, stating earlier today: “Real wages have now fallen to almost £300 lower than they were 15 years ago.
“Alongside a decade of the Conservatives’ failure to grow the economy, their punishing tax rises, surging inflation and real terms cut to support mean people across the country are facing a cost of living tsunami. By refusing to take action on the cost of living through an emergency budget, Rishi Sunak has shown once again the Tories simply aren’t on the side of working people,” he went on.
Liberal Democrat treasury spokesperson Christine Jardine MP said: “These figures confirm families are facing a cost of living nightmare, with wages failing to keep up with soaring energy bills and food prices.
“It is the worst possible time to be raising taxes on struggling families, yet still the Chancellor is ploughing ahead.
“Rishi Sunak has cashed in billions of pounds in extra VAT receipts this year as prices go through the roof. He needs to put some of this money back into people’s pockets through an emergency tax cut, instead of cashing in on their misery.
“Slashing VAT would cut prices, reduce inflation and boost spending, it should be a no brainer.”
