Boost to Low-Paid British Workers No Match for Rising Inflation

(Bloomberg) -- Lower-paid workers are benefiting from wage increases but U.K. consumers are still being squeezed by rising prices, according to the Office for National Statistics.

Real pay is falling for the first time since 2014, the ONS said in a report, as ballooning inflation outpaces 2.2 percent earnings growth. That tallies with separate figures published Thursday showing retail sales are falling at the fastest pace since 2009.

“The failure of nominal wage growth to match increases in inflation has left real weekly earnings down,” said Stephen Clarke, policy analyst at the Resolution Foundation. “The silver lining is good progress for lower-paid people, with the National Living Wage -- now in its second year -- helping to boost pay packets.”

The number of low-paid jobs has dropped by over 2 percentage points since 2016, probably because of the introduction of the living wage in 2016, the ONS said.

Women have “disproportionately benefited” from this boost since they’re more likely to be in that bracket, Clarke said. The full-time gender pay gap ticked down to 9.1 percent, its lowest level since records began in 1997, the ONS said.

Looking at a breakdown of type of employment and age, however, a pattern emerges of women taking part-time roles -- and the pay gap widening for full time workers -- after the age of 30. That’s the average age for women having their first child, the ONS said.

Taking all types of workers into account, the part-time to full-time pay gap is 18.4 percent this year, a slight uptick from 18.2 percent last year, statisticians said at a briefing in London.

To contact the reporter on this story: Jill Ward in London at jward98@bloomberg.net.

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Lucy Meakin, Brian Swint

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