Pay growth continues upwards, driven by growth in regular pay. Inflation, however, remains very high, eroding the ‘real’ value of wages.
Average regular pay (excluding bonuses) increased by 6.7% year-on year in the period between January 2023 to March 2023. This is very strong by historic standards and is up 0.1 percentage point compared to the previous 3-month period.
Average pay, including bonuses, in the UK was £642 per week in February 2023, up 4.6% year-on-year.
One reason for rising pay is public sector pay change which saw regular pay increase by 5.6%. This is the highest level of growth seen since Autumn 2003 and the gap in growth rates between private and public sector pay is narrowing.
Industrial disputes rose in March 2023, with up to 556,000 working days lost. This is below the December peak of 822,000.
However, the growth in regular pay is not keeping pace with inflation, with most workers seeing their wages fall behind the cost of living, meaning a “real terms” reduction.
Using the wider RPI measure of inflation, which gives a wide coverage of housing costs, “real wages” have been falling since October 2021 and are now down 7.8% year on year.
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