UK workers’ pay rises fall behind inflation amid cost-of-living crisis

theguardian.com:

Pay for workers in Britain has fallen in real terms for the first time in more than a year, despite signs that employers shrugged off concerns over the Omicron coronavirus variant to continue hiring in December.

Average wages, after taking account of inflation, dropped in November for the first time since July 2020 amid growing concerns over the hit to living standards this year from high inflation and surging energy bills.

The Office for National Statistics said although average total earnings grew at an annual rate of 4.2% in November, the impact from soaring rates of inflation meant workers suffered a 0.9% real-terms cut in their pay packets. The official rate of inflation reached a 10-year high of 5.1% in November.

However, the latest labour market snapshot revealed steady gains for job creation despite the fallout from Omicron and worsening squeeze on pay. According to figures from HMRC, the number of employees on UK company payrolls rose by 184,000 on the month to 29.5 million, an increase of 409,000 on pre-pandemic levels as the jobs market continues to recover from Covid-19.

Reflecting staff shortages across the economy, the number of job vacancies rose for most industries over the three months to December to a record 1.2 million despite a slowdown in the rate of growth in recent months.

Employment experts said there were signs that Britain was emerging from Covid-19 with robust levels of unemployment but a tight squeeze on living standards that was set to persist well into 2022.

Hannah Slaughter, a senior economist at the Resolution Foundation, said that falling unemployment was a “remarkable success” but that inflation-adjusted pay was now shrinking for the third time in a decade. Real-terms pay also fell in 2017