The UK is battling through the worst cost of living crisis in a generation, with inflation running at a 30-year high and everyday goods costing more than they have for years. Household budgets are squeezed even further by pay packets failing to catch up with spiking inflation
Is my wage rising with inflation?
The Office for National Statistics revealed last week that average earnings grew by 5.4 percent in February, including bonuses.
But this is a marked failure to keep up with a 6.2 percent rise in the consumer prices index in the same month.
For those who missed out on a bonus, the situation is worse, as average wages increased by only four percent.
READ MORE: Martin Lewis unpacks what your tax code means – check now
This is actually the biggest wage drop in nearly nine years, being the steepest decline since the third quarter of 2013.
What’s more, the recent increases to the Minimum and National Living Wages at risk of being wiped out by inflation.
The ONS said real pay was now “falling noticeably”, with figures for the month of February showing regular wages dropped 2.1 percent after inflation – the biggest decrease since August 2013.
Since February, inflation has risen to seven percent, and experts have warned wages will lag behind as inflation is expected to skyrocket in the autumn.
When will wages go up again?
The Resolution Foundation said the current fall in real wages was not projected to end until late 2023.
The foundation further predicted that when the end of 2023 comes, average wages would be no higher than in 2007.
Nye Cominetti, the thinktank’s senior economist, said: “With the current inflation being driven by soaring energy bills, it will be lower-income families feeling the squeeze the most.”
But Shachar Bialick, CEO and founder of Curve, a financial app, thinks the UK could be coming to the end of the cycle – but the pain won’t stop there.
Mr Bialick told Express.co.uk: “Wage growth is struggling to keep up with the cost of living crisis, meaning that despite pay rises, Brits are still left with less money in their pocket.
“The upside is that while inflation might rise further, we’ve reached a peak with the rising cost of living.
“In economic terms we’re nearing the end of the cycle. The cost of living will go down before increasing again, giving Brits some respite from heightened costs.”