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Pay Matches Inflation for Richest UK Workers as Rest Fall Behind - BLOOMBERG

JULY 19, 2022

(Bloomberg) -- Britain’s richest workers are being protected against rocketing inflation as their wages rise in line with prices, while the rest of the country is hit by the worst living standards squeeze in generations, official figures show.

The best paid 1% of workers, around 300,000 people on more than £170,000 ($204,000) a year, saw their pay increase by an annual 9.1% on average in the three months through May, according to Resolution Foundation analysis of today’s Office for National Statistics payroll data. 

By comparison, the lowest earning 10%, around 3 million people on less than £8,300 a year, got pay rises of just 1.3% -- well below the current 9.1% rate of inflation. Across the country, real regular pay is shrinking at 2.8%, the biggest income squeeze on record, the ONS said.

The figures underscore the unequal impact of the inflation shock that has seen consumer prices soar to a 40-year high. 

Wealthier UK households have not only been able to command big pay rises but set aside billions of pounds of extra savings during lockdown. Poorer households are struggling with real terms pay cuts and took on debt during Covid.

Separate ONS labor force data showed that the industries awarding the biggest pay rises are finance and business services, such as accountancy, as well as construction where there have been severe job shortages. Those sectors saw pay growth of more than 8% in the three months to May.

Pay in retail and hospitality, traditionally lower earning jobs where there has been a chronic jobs crisis, rose 7.6% but the ONS warned the figures might be skewed because many of those workers were on furlough last year.

Private-sector pay is running far ahead of the public sector, at 7.2% compared with 1.5%. The ONS said the gap between the two is “among the largest we have seen.”

New pay deals are expected to be announced for 2.5 million workers today. 


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