Record rise in UK wages did not offset the impact of inflation
According to the Office for National Statistics (ONS), the average wages of workers in the United Kingdom increased by 6.7% in the fourth quarter of 2022. This marks the largest increase in the entire historical series outside the pandemic period. However, despite the increase in wages, employees continued to experience a decline in purchasing power due to a more significant rise in inflation.
During the period between October and December, the average growth in total salary, including bonuses, was 5.9%, while the growth in regular salary, which excludes bonuses, was 6.7%.
The ONS highlighted that the growth rate for regular salary is the strongest observed outside of the Covid-19 pandemic period.
The average increase in regular salary for private sector workers was 7.3%, while it was 4.2% for public sector workers. The ONS noted that this is the highest growth rate observed for the private sector outside of the period of the coronavirus pandemic.
Despite the record increase in wages observed in the fourth quarter, the growth in total and regular compensation fell to 3.1% and 2.5%, respectively, when adjusted for inflation.
This decline, while not as severe as the largest drop in real total wages recorded between February and April 2009 (-4.5%), “remains one of the largest declines since comparable records began in 2001,” according to the ONS.
On the other hand, during the period of October to December, the unemployment rate in the United Kingdom increased by one-tenth compared to the preceding three months, reaching 3.7%. At the same time, the level of employment in the country rose by two-tenths to reach 75.6%.
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The number of working days lost due to labor disputes in the United Kingdom increased significantly in December, reaching a total of 843,000 days. This represents a substantial increase compared to the 467,000 days lost in November and is the highest figure recorded since November 2011, according to the Office for National Statistics (ONS).
Workers from various sectors in the UK have been protesting and demanding pay rises in response to the increasing cost of living. This has led to strikes in sectors ranging from postal services to healthcare.