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£1,200 pay rise needed to keep up with inflation

 

Britons need a £1,200 pay rise to keep up with inflation despite the Consumer Price Index (CPI) rate easing last month, according to experts.

Research conducted by investment platform easyMoney found that the average salary in the UK would need to jump by £1,239 this year to keep pace.

Figures from the Office for National Statistics (ONS) published last week revealed that the CPI inflation rate for the 12 months to April 2024 eased to 2.3 per cent over the period.

This is close to the Bank of England's desired two per cent target with the central bank having raised interest rates to 5.25 per cent in an attempt to bring inflation down.

It appears to have contributed to this latest drop but British workers appear to still be getting a raw deal based on easyMoney's analysis.

Based on the average rate of inflation for 2024 up today, the platform has forecast that by the end of the year, year-on-year inflation will stand at 3.5 per cent.

To match this in earnings, the average salary would have to be raised by £1,239 to hit £36,643 by the end of this year.

In comparison, , the average salary rose by 6.4 per cent to £33,449 in 2021 while inflation hit 9.1 per cent.

As such, salary growth remained negative 2.7 per cent behind inflation despite a solid pay rise being given.

Similarly, 2023 earnings saw another increase of 5.8 per cent to reach an average of £35,404 per year.

Despite this hike, wages were up against annual inflation of 7.3 per cent per cent which means earnings behind inflation by 1.5 per cent.

 


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