To ask His Majesty's Government what economic assessment they (1) have undertaken, and (2) plan to undertake, regarding the decline in real wages, given the increase in inflation.
Answered on
22 November 2022
Nominal total pay growth is strong, 6.0% (including bonuses) in the Q3 of this year. Rising global energy prices exacerbated by Putin’s war, combined with supply chain disruptions stemming from the Covid-19 pandemic, has driven price inflation up in the UK and across Europe. Adjusting for CPI inflation, real wages fell by 3.7% in Q3. We will continue to monitor indicators of wage growth and inflation.
The government remains committed to tackling low pay. From 1 April 2023, the National Living Wage (NLW) will increase by 9.7% to £10.42 an hour for workers aged 23 and over, in line with the government’s ambitious target for the NLW to reach two-thirds of median earnings by 2024, and for the age threshold to be lowered to those aged 21 and over. This represents an increase of over £1,600 to the annual earnings of a full-time worker on the NLW and is expected to benefit over 2 million low paid workers. Young people and apprentices on the National Minimum Wage (NMW) will also see a boost to their wages.