Pay inflation Who's in charge when it comes to wages - workers or bosses?

When refuse collectors in Eastbourne, secured a huge 11% pay rise, increasing to 19% for the lowest paid, it seemed like worker power was back.

- Phillip Inman

It was early 2022 and inflation was rocketing on its way to a peak of 11%. In a desperate scramble to keep pace with rising prices to protect their incomes, workers across the UK's public and private sectors took widescale industrial action in a way that brought back memories of the 1970s.

What followed was a series of pay deals thrashed out between bosses and employees, with unions often arguing they had been due pay increases for years.

Now, a similar scenario is playing out, though this time by stealth.

The Bank of England has noted that wages have quietly continued to rise over the last year, and worries this could indicate a seismic and more long-lasting shift in the relationship between workers and employers.

Last week's public sector pay awards were more than ministers had previously said they could afford and outstripped higher than expected inflation - although the rise was labelled "derisory" by disgruntled doctors.

Relations between bosses and the rank and file in office jobs have already been frayed by a shift towards remote working caused by the pandemic, and then companies' increasing insistence on more frequent attendance at work.

Threadneedle Street policymakers have asked whether the wage rises indicate the power balance has moved back towards workers, allowing them to protect their finances despite economic ups and downs, including the shocks of multiple wars and Donald Trump's trade offensive.

Data from the Office for National Statistics (ONS) has gone some way to justifying this view.

Using payroll data, the ONS said hotels and restaurants paid staff 8.5% more over the year to April when inflation was 3.5%.

Retail workers managed to secure a rise in median pay of 6.9% over the same period.

The average across the economy in the year to April was 6.4%.