Amid the turbulent climate of economic uncertainty, the UK is experiencing a remarkable surge in wage growth, a phenomenon that's both a boon for workers, and a potential concern for employers and HR alike.
The Office for National Statistics (ONS) has recently released figures that reveal average regular pay, excluding bonuses, skyrocketed by an impressive 7.3% during the three months leading up to May, compared to the same period the previous year.
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This meteoric rise, however, has spurred a multitude of questions about its drivers, consequences, and potential implications.
This wage push hasn't just been a response to individual hardship; it's also been fuelled by businesses' ability to pass on increased costs to their customers.
Inflation's grip and its effect on wages
The driving force behind this wage growth is no secret – it’s a direct consequence of inflation. The UK has been grappling with a stubbornly high inflation rate, with the Consumer Prices Index (CPI) spiking to 11.1% growth at its peak last year and remaining at 8.7% for May.
The persistent surge in the cost of living within the UK has led to a ripple effect, with energy and food prices putting immense pressure on households across the nation. In response, workers have sought pay hikes from their employers to counteract the rising expenses.