Wage growth in the UK’s private sector accelerated in the three months to October as inflation rose into double digits, according to data which promises to fuel an increasingly bitter stand-off between ministers and unions.
Annual growth of 6.9 per cent in regular weekly earnings, excluding bonuses, was the highest outside the pandemic period in the private sector, the Office for National Statistics said on Tuesday — although workers have seen their pay fall sharply in real terms as consumer prices have risen even faster.
Public sector workers have suffered a much bigger hit to living standards, with their earnings growing by just 2.7 per cent over the same period, one of the biggest gaps recorded between the private and public sector, the ONS said.
The figures will reinforce worries at the Bank of England that a tight labour market is driving wage growth to a level that is incompatible with its 2 per cent inflation target. But they also show that this is almost entirely due to private sector wage deals. The government has argued that it cannot improve public sector pay offers, for fear of further fuelling inflation.
Jeremy Hunt, chancellor, said in response to the figures that the government’s plans would “help to more than halve inflation next year” but that this would require “some difficult decisions now”, adding: “Any action that risks embedding high prices into our economic will only prolong the pain for everyone.”
