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UK’s purchasing power drop is the biggest in more than 20 years

UK workers have suffered the biggest drop in their purchasing power in more than 20 years as prices continue to rise.

Average real wages – which represent inflation – fell 3% between April and June compared to the same period last year, according to data from the Office of National Statistics (ONS) published on Tuesday. .

“The actual payment amount continues to fall. Excluding bonuses, it is still falling faster than at any time since comparable records began in 2001,” Darren Morgan, director of economic statistics at the ONS, said in a tweet.

Regular pay (excluding bonuses) rose by 4.7% between April and June, the ONS said, but with prices rising at a much faster pace, employees are worse off.

Inflation rose to 9.4%, a 40-year high, prompting the Bank of England to raise interest rates six times since December, and prices are expected to rise further later this year.

On Tuesday, data firm Kantar said UK grocery price inflation had hit 11.6% in the past four weeks, the highest level seen in 14 years of tracking data. Average annual shopping bills increased by £533 ($640).

Colossal rises in energy bills – the average annual bill has already jumped 54% this year to reach nearly £2,000 ($2,410) – have plunged millions of Brits into a cost-of-living crisis, forcing many to choose between “heat or eat”. .

More pain is on the way. Annual energy bills for millions of households could reach 5,000 pounds ($6,000) next spring, according to estimates by research firm Auxilione.

“As real wages fall, the pressure on low-income families grows more and more. It’s just not right that people have to make increasingly impossible decisions about which essentials to give up,” the Joseph Rowntree Foundation, an anti-poverty charity, said in a tweet Tuesday.

UK workers have been clamoring for wage increases in recent months to manage the squeeze. In June, thousands of railroad workers went on strike to demand that their wages rise in line with inflation, and further strikes are planned for this week.

On Tuesday, thousands of British Airways check-in workers got an average 13% pay rise after threatening to go on strike.

The workers’ union said the increase would help reverse pay cuts employees have made during the pandemic.

Source: CNN Brasil

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