Market gloom for UK workers Households worry about debt as incomes flatline

Private sector pay increased on average by just 3.4% in December, according to official labour market data released yesterday, the same as the rise in inflation at the end of last year.

- Phillip Inman

No wonder the vast majority of workers are feeling the winter blues. Their incomes, adjusted for rising shop prices, have flatlined, leaving them no better off than they were a year earlier.

The most recent surveys of consumer confidence reveal a dismal picture of households worried about growing debts and shrinking savings now that their incomes have flatlined.

There is also the looming threat of redundancy or, more likely, the prospect of rival firms putting a block on hiring, which forces workers to stay in their current, possibly not very well-paid job.

Unemployment rose to a fresh five-year high of 5.2% in the three months to December 2025, the Office for National Statistics said, reflecting a reluctance among employers to hold on to staff with little to do in the hope of better times, or hire new people.