Real wages fall as pay lags behind inflation

18 Feb 2022

Wage growth in the UK struggled to keep up with increasing inflation between October and December 2021, according to the latest data from the Office for National Statistics (ONS).

Average weekly pay packets across Britain fell in December by -1.2%, reflecting how wages are struggling to keep up with the rising cost of living.

Other figures released by the ONS show that between October and December 2021 employment was at 75.5%, while unemployment was at 4.1% and economic inactivity was at 21.2%.

The number of staff on businesses' payrolls in January rose by 108,000, slowing from December's increase of 131,000.

Commenting on the figures, Matthew Percival, Director for People and Skills at the Confederation of British Industry (CBI), said: 'The good news is that the UK economy is continuing to create jobs. The bad news is that businesses are struggling to hire and pay is failing to keep up with inflation.

'Bold action is needed to go for growth, with steps to address skills and labour shortages. Replacing the Apprenticeship Levy with a Skills Challenge Fund and creating a new independent Council for Future Skills to optimise policy towards avoiding shortages in the future are important first steps.'