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Pay rising at highest rate in 20 years but stays below inflation

Fiona Kyle
January 17, 2023

Official figures show that average pay rose by 6.4% between September and November 2022 compared with the same period the previous year.

It's the fastest that wages have grown since 2001, except for the pandemic when employees received pay rises after returning to work.

There was a big difference between the wage growth of people working within the private and public sector. The average wage within the private sector rose by 7.2%, compared with a 3.3% increase in the public sector.

However, when adjusted to take account of rising prices, wages fell by 2.6%. It is the failure of wages to keep up with the rising cost of living that has led to thousands of workers striking over pay and living conditions - the latest group being teachers in England and Wales who have just announced strike dates in February and March.

The cost of living is currently rising at its fastest rate in almost 40 years. Energy and food prices have risen sharply leading inflation to rise to 10.7%.

Although there are worries that the UK economy is slowing dow, the employment rate has remained steady, although the unemployment rate has started to rise slightly.

Chancellor Jeremy Hunt described the UK labour market as "resilient", saying: "The single best way to help people's wages go further is to stick to our plan to halve inflation this year. We must not do anything that risks permanently embedding high prices into our economy, which will only prolong the pain for everyone."

However Labour's shadow work and pensions secretary Jonathan Ashworth described the government as "totally bereft of ideas when it comes to tackling the cost of living crisis".

He said: "Real wages are plummeting, almost two and a half million people are out of work because of sickness and far too many people - especially the over 50s - aren't getting the support they need to either stay in work or to go back to work."