Real pay suffers biggest drop since records began

UK employment picked up in the three months to May but real pay fell at the fastest rate since records began, according to figures released on Tuesday by the Office for National Statistics.

Average total pay growth was 6.2%, down from 6.8% in April, while regular pay growth excluding bonuses was 4.3%, up a touch from 4.2%. Adjusted for inflation, however, total pay fell by 0.9% and regular pay was down 2.8% - the biggest fall since records began in 2001.

The data also showed that the unemployment rate was steady at 3.8% in the three months to May.

Meanwhile, the number of people in employment rose by 296,000. This was well ahead of consensus expectations of 170,000 and marked the biggest jump since the three months to August 2021.

David Freeman, head of labour market and household statistics at the ONS, said: "Following recent increases in inflation, pay is now clearly falling in real terms both including and excluding bonuses.

"Excluding bonuses, real pay is now dropping faster than at any time since records began in 2001."