Real pay has fallen sharply with public sector workers seeing a particularly big hit to their earnings while bankers toasted “extremely high” bonuses, official figures show.
Public sector workers saw their wages rise 1.5 per cent in the three months to April compared with a year earlier. That is well below the current inflation rate of 9 per cent.
Workers in the private sector saw an average pay rise of 8 per cent over the period, the Office for National Statistics said.
Across the whole economy, real pay, adjusted for inflation and excluding bonuses, fell 2.2 per cent in the quarter.
In April alone, wages fell 4.5 per cent, when adjusted for the effect of soaring prices. It is the biggest fall since records began in January 2001.
When bonus payments are included, real earnings rose 0.4 per cent, largely because of a bumper payday in the City of London.
Bankers and professional services workers were treates to “extremely high” bonuses in March, the ONS said. Earnings in financial and professional services as a whole were up 10.6 per cent.
The fall in real pay across the economy as a whole came despite unemployment falling to its lowest level in 50 years. The official unemployment rate was 3.8 per cent, meaning it is below pre-pandemic levels.
However, hundreds of thousands of people have dropped out of the Labour market since the pandemic began. They are not counted in the unemployment rate as they are not currently seeking work.
The UK is heading closer to recession this year after the economy unexpectedly shrank in April.
Sam Beckett, head of economic statistics at the ONS, said: “Today’s figures continue to show a mixed picture for the labour market.
“While the number of people in employment is up again in the three months to April, the figure remains below pre-pandemic levels.
“Moreover, although the number of people neither in work nor looking for a job has fallen slightly in the latest period, that remains well up on where it was before Covid-19 struck.
“At the same time, unemployment is close to a 50-year low point and there was a record low number of redundancies.
“Job vacancies are still slowly rising, too. At a new record level of 1.3 million, this is over half a million more than before the onset of the pandemic.”
She added: “The high level of bonuses continues to cushion the effects of rising prices on total earnings for some workers, but if you exclude bonuses, pay in real terms is falling at its fastest rate in over a decade.”
