general news

UK’s living standards worsen as pay fails to keep pace with high costs

UK’s living standards worsen as pay fails to keep pace with high costs
UK’s living standards worsen as pay fails to keep pace with high costs

The living standards in the U.K. have dropped to a record low in May despite pay rises since they failed to keep pace with the soaring costs.

According to the Office for National Statistics, the combined earnings in private and public sectors grew by 4.3% in the 3 months till May excluding bonuses. However, this indicated in record-low pay growth of 2.8% year over year.

Meanwhile, citizens are blaming the conservative government for leaving them more exposed to inflation and keeping the cost-of-living problem unsolved because of the decline in real wages.

In comparison to the private sector, wherein the pay growth was at least five times faster, public sector employees fared considerably worse. From March to May 2022, average pay growth, inclusive of bonuses, was 1.5% for the public sector and 7.2% for the private sector, with a combined average of 6.2%.

Notably, the U.K. government is planning to grant compensation awards to the 2.5 million public sector employees, with average pay rises of around 5%. That would be significantly less than the 9.1% inflation rate, which the Bank of England predicts would increase to above 11% by autumn this year.

However, positive news came in the form of statistics demonstrating a rise in the labor force in May. Over 290,000 new workers have been employed, which is approximately 120,000 more than what analysts had forecasted.

On the other hand, employers have expanded the number of open positions to a new high while unemployment stayed at 3.8%. Organizations claimed that hiring issues across several companies were delaying orders and impacting costs.

The economy has a million fewer workers than anticipated, many of them being over 50 and have retired early or due to illness. To entice the over-50s who have left the labor force back into it, the government is focusing on them as an eminent pillar for economic growth.

On the contrary, for suspected imminent recession and salary rises that fall short of inflation, Bank of England officials are anticipated to hike interest rates even after several warnings of economic loss.

Source Credits:

https://www.theguardian.com/business/2022/jul/19/uk-living-standards-fall-inflation-cost-of-living-crisis-prices

About the author

Vinisha Joshi

Vinisha Joshi

Despite graduating with an engineering degree in electronics and communication, Vinisha Joshi chose the road less travelled, and decided to pursue her career in content writing . Currently, she pens down articles for cuereport.com and a few other distinguished news platforms, pertaining to business and finance.