UK inflation has reached the highest level for 40 years (9.4 per cent) and is now forecast by the Bank of England to surpass 13 per cent this year. Living standards are now being squeezed as wages fail to rise in line with prices, but the experience of the highest and lowest paid in society is markedly different, analysis by the Centre for Economics and Business Research (Cebr) finds.
Since March, median wages has grown at an annual rate of around 6 per cent, significantly below consumer price inflation (CPI), while the bottom 10 per cent of earners (who earn less than £680 a month) have endured annual wage growth of just 1 per cent.
Meanwhile the highest earners in the country, those in the 99th percentile, are the only group who have experienced above-inflation wage growth this year – in March their average monthly pay saw year-on-year growth of 11 per cent. Their monthly salary is now more than £14,000.
“Although variation in wage growth performance between different income groups is to be expected over time, the stagnation in pay among the poorest workers is coming at a time of extraordinary price rises and their ability to dip into savings is usually limited,” writes Cebr’s chief executive Nina Skero.
“For months, Cebr has been saying that additional support which is very narrowly targeted at the poorest households (including those in work) will be necessary if they are to avoid worsening hardship.”