Living standards plummet at their fastest rate for 14 years

Biggest quarterly fall in pay since the financial crash

- Jonathan Prynn

LIVING standards for millions of workers plummeted at their fastest rate since for 14 years over the winter as rampant inflation deepened the cost of living crisis, official figures show today.

Total average wages including bonuses dropped by 3.2 per cent in real terms in the three months to January, the biggest quarterly decline since February to April 2009 at the height of the financial crisis, according to the Office for National Statistics, and among the largest falls seen since detailed records began in 2001.

If bonuses are excluded regular real wages fell by 2.4 per cent. In cash terms total pay with bonuses rose by 5.7 per cent and regular pay by 6.5 per cent, down from 6.7 per cent, in a sign that the labour market is finally starting to cool.

But this was heavily outstripped by soaring prices, which have been going up at close to or above 10 per cent since last summer, peaking at 11.1 per cent in October. Food prices have been rocketing even faster at a record 17.1 per cent amid supermarket shortages of fresh fruit and vegetables.

Today’s ONS figures also showed regular pay for private sector workers went up by 7 per cent compared with just 4.8 per cent for public sector employees.

The data comes on the eve of tomorrow’s Budget and another wave of strikes by Tube workers and teachers. However, the number of days lost to strikes fell from 822,000 in December to 220,000 in January 2023.