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Tuesday, Jul 22, 2025

UK workers suffer biggest hit to their wages since records began

UK workers suffer biggest hit to their wages since records began

UK workers have suffered the biggest drop in their spending power in more than 20 years as prices keep soaring.
Average real wages — which account for inflation — fell by 3% between April and June compared with the same period last year, according to data from the Office for National Statistics published Tuesday.

"The real value of pay continues to fall. Excluding bonuses, it is still dropping faster than at any time since comparable records began in 2001," Darren Morgan, director of economic statistics at the ONS, said in a tweet.

Regular pay (excluding bonuses) was up 4.7% between April and June, the ONS said, but with prices rising at a much faster rate, employees are left worse off.

Inflation has soared to 9.4%, a 40-year high, pushing the Bank of England to raise interest rates six times since December, and prices are projected to go even higher later this year.

On Tuesday, data firm Kantar said that UK grocery price inflation hit 11.6% over the past four weeks, the highest level it had seen in 14 years of tracking the data. Average annual shopping bills are up by £533 ($640).

Colossal rises in energy bills — the average annual bill has already jumped 54% this year to hit nearly £2,000 ($2,410) — have plunged millions of Britons into a cost-of-living crisis, forcing many to choose between "heating or eating."

Further pain is on the way. Annual energy bills for millions of households could top £5,000 ($6,000) next spring, according to estimates by research firm Auxilione.

"As real wages fall, the pressure on low-income families grows ever greater. It's simply not right that people are having to make increasingly impossible decisions about which essentials to give up," the Joseph Rowntree Foundation, an anti-poverty charity, said in a Tuesday tweet.

UK workers have been clamoring for pay rises in recent months to manage the squeeze. In June, thousands of rail workers went on strike to demand that their pay rose in line with inflation, and further walkouts are planned this week.

On Tuesday, thousands of check-in staff at British Airways secured an average 13% pay rise after they threatened to go on strike.

Unite, the workers' union, said the increase would help reverse pay cuts staff took during the pandemic.
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