Cost of living crunch ‘has just begun’

The UK’s cost of living crunch “has just begun” and is “going to get worse”, a leading think tank warns as data released by Office for National Statistics (ONS) today (18) shows that price rose faster than wages in November.

“The year ahead will be dominated by the cost of living crunch and labour shortages, Stephen Evans, chief executive of the Learning and Work Institute told The Guardian. 

“Today’s data shows prices rose faster than wages in November. With higher inflation and tax rises still to come, the Government needs to help households. The cost of living crunch has only just begun.”

Pay for workers in Britain has fallen in real terms for the first time in more than a year, points out ONS with average earnings rising by 3.5 per cent in November, below the rate of increase for consumer prices for the first time since July 2020.

That left real average weekly earnings, a measure that captures the difference between pay and wages, down 0.9 per cent. The official rate of inflation reached a 10-year high of 5.1 per cent in November.

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.

Frances O’Grady, the general secretary of the TUC, said, “While it’s good to see employment continuing to rise, on pay it’s the same story of a squeeze on workers.

“Working people deserve a decent standard of living and a wage they can raise a family on. But instead, following the worse pay squeeze for two centuries, real pay is falling, and they now face a cost-of-living crisis.”