Wage growth continued to slow in October as inflation reached a 10-year high, figures published by the Office for National Statistics reveal.
Real earnings – which are earnings adjusted to reflect changes in consumer and housing costs – were at the same level this October as the year before after a period of artificially high growth over the summer months.
Real earnings growth reached a peak of 5.8 per cent in April, though this rise can largely be attributed to a lower baseline in April 2020, when earnings declined due to lockdowns and the introduction of the furlough scheme.
Wage growth has slowed in the months since as inflation has continued to rise (it now stands at 5.1 per cent). This meant that, by October, wages had essentially returned to the level they were at last year.
The figures threaten a period of declining living standards in the UK. The Bank of England expects inflation to continue to rise and remain above the target of 2 per cent for the next two years. If wages fail to keep up with price growth, many Britons will find their take-home pay won’t be enough to maintain the lifestyle they’ve become accustomed to.