London Daily

Focus on the big picture.
Saturday, Oct 04, 2025

Biggest UK fall in real wages for 100 years looms, warns TUC

Biggest UK fall in real wages for 100 years looms, warns TUC

Study shows pay rises could fall behind inflation by 8% later this year, an unprecedented drop in living standards
Pay rises could fall behind inflation by almost 8% later this year, marking the biggest fall in real wages for 100 years, according to analysis by the TUC.

The TUC said a prediction by the Bank of England that inflation would jump to 13% in the fourth quarter of this year at a time when wages were expected to increase by just 5.25% meant living standards would fall by an unprecedented 7.75%.

The figure was calculated by looking at the impact of inflation on workers’ living standards using the latest Bank forecasts. The TUC said that workers had not suffered such a severe and prolonged decline in wages relative to inflation since the 1920s.

Tens of thousands of workers have signalled that they are prepared to strike after a series of ballots for industrial action.

More than 115,000 UK postal workers are to stage a series of strikes later this month after they rejected a pay offer worth up to 5.5%. They could soon be joined by up to 480,000 nurses after the Royal College of Nursing urged its members to back strike action in support of a pay claim for 5% above June’s 11.8% retail prices index (RPI) measure of inflation.

Ministers offered nurses a 3% pay award with a top-up for senior nurses to 4%. But the RCN, which has increased its strike fund by £15m to £50m, said: “This leaves an experienced nurse over £1,000 worse off in real terms.”

The Bank of England revamped its forecasts for inflation this winter to a peak of 13% after energy experts said the price cap on average household bills would increase to £3,600 in October and may go up to as much as £4,200 in January 2023. In recent days, estimates have signalled the average bill could rise to as much as £5,000 next year.

Businesses are also under pressure from soaring energy bills, which the Bank said were mostly being passed on to consumers in the form of higher prices.

Pay rises are expected to account for only 20% of inflation after remaining subdued through the autumn and winter at about 5.25%.

The TUC said the combination of pay rises about one percentage point above the pre-pandemic level of 4% and double-digit inflation amounted to “the largest decline for exactly a century”.

“Real pay has fallen by more on only one occasion, a decline of 13.3% in the fourth quarter of 1922 – as the post first world war pay and price inflation went sharply into reverse. The only other comparable figure was 7.2% in the first quarter of 1940.”

The TUC general secretary, Frances O’Grady, said: “Despite the dire pay forecast and surging prices, the Conservatives still don’t seem to recognise that we’re in a crisis that needs an emergency response.

“It’s time for the government to get round the table with trade union and business leaders to find a solution – not wait another month while the Conservative party finishes electing its leader.”

She said large businesses could also accept lower profits by refusing to pass on all the higher costs they face.

Official figures show that average total pay growth has fallen for the last two months to 6.2%. Experts said the level of pay growth was exaggerated during the City bonus period between February and April, when investment banks traditionally offer staff large one-off pay awards.

The TUC said total pay in the finance and insurance sector was 13.6% in the year to May 2022 once bonuses were included, down marginally from the recent peak of 15.4% in the year to March.

“In March 2022, City bonuses were at their highest cash level on record,” the report said and pushed the gap between total pay and pay without bonuses to 2.8 percentage points – its largest on record.

O’Grady said: “The government must also get the economy back in balance again. Too much goes into profits and to those who are already wealthy, and too little goes into wages and to working families.

“To change this, working people need stronger bargaining power to get a fair share of the wealth they produce. A great approach would be the introduction of industry-wide fair pay agreements.”
Newsletter

Related Articles

0:00
0:00
Close
Trump Administration Launches “TrumpRx” Plan to Enable Direct Drug Sales at Deep Discounts
Trump Announces Intention to Impose 100 Percent Tariff on Foreign-Made Films
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Singapore and Hong Kong Vie to Dominate Asia’s Rising Gold Trade
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Manhattan Sees Surge in Office-to-Housing Conversions, Highest Since 2008
Switzerland and U.S. Issue Joint Assurance Against Currency Manipulation
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Thomas Jacob Sanford Named as Suspect in Deadly Michigan Church Shooting and Arson
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
New York Man Arrested After On-Air Confession to 2017 Parents’ Murders
U.S. Defense Chief Orders Sudden Summit of Hundreds of Generals and Admirals
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
Trump Claims FBI Planted 274 Agents at Capitol Riot, Citing Unverified Reports
India: Internet Suspended in Bareilly Amid Communal Clashes Between Muslims and Hindus
Supreme Court Extends Freeze on Nearly $5 Billion in U.S. Foreign Aid at Trump’s Request
Archaeologists Recover Statues and Temples from 2,000-Year-Old Sunken City off Alexandria
China Deploys 2,000 Workers to Spain to Build Major EV Battery Factory, Raising European Dependence
Speed Takes Over: How Drive-Through Coffee Chains Are Rewriting U.S. Coffee Culture
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Ringo Starr Champions Enduring Beatles Legacy While Debuting Las Vegas Art Show
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
FBI Removes Agents Who Kneeled at 2020 Protest, Citing Breach of Professional Conduct
Trump Alleges ‘Triple Sabotage’ at United Nations After Escalator and Teleprompter Failures
Shock in France: 5 Years in Prison for Former President Nicolas Sarkozy
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
BNP Paribas Abandons Ban on 'Controversial Weapons' Financing Amid Europe’s Defence Push
Typhoon Ragasa Leaves Trail of Destruction Across East Asia Before Making Landfall in China
The Personality Rights Challenge in India’s AI Era
Big Banks Rebuild in Hong Kong as Deal Volume Surges
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Arnault Denounces Proposed Wealth Tax as Threat to French Economy
Study Finds No Safe Level of Alcohol for Dementia Risk
Denmark Investigates Drone Incursion, Does Not Rule Out Russian Involvement
Lilly CEO Warns UK Is ‘Worst Country in Europe’ for Drug Prices, Pulls Back Investment
Nigel Farage Emerges as Central Force in British Politics with Reform UK Surge
Disney Reinstates ‘Jimmy Kimmel Live!’ after Six-Day Suspension over Charlie Kirk Comments
U.S. Prosecutors Move to Break Up Google’s Advertising Monopoly
Nvidia Pledges Up to $100 Billion Investment in OpenAI to Power Massive AI Data Center Build-Out
U.S. Signals ‘Large and Forceful’ Support for Argentina Amid Market Turmoil
Nvidia and Abu Dhabi’s TII Launch First AI-&-Robotics Lab in the Middle East
Vietnam Faces Up to $25 Billion Export Loss as U.S. Tariffs Bite
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Indonesia Court Upholds Military Law Amid Concerns Over Expanded Civilian Role
Larry Ellison, Michael Dell and Rupert Murdoch Join Trump-Backed Bid to Take Over TikTok
Trump and Musk Reunite Publicly for First Time Since Fallout at Kirk Memorial
Vietnam Closes 86 Million Untouched Bank Accounts Over Biometric ID Rules
×