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Rishi Sunak was facing more economic pressure today as new jobs figures showed the impact of soaring inflation on British workers.

The Office for National Statistics said that basic pay droppd to minus 1 per cent and was now ‘falling noticeably in real terms’ as the cost of living rises sharply.  

UK workers suffered the biggest fall in their take-home cash for nearly nine years as the cost-of-living squeeze tightened, according to official figures.

The ONS said regular pay excluding bonuses tumbled 1.8 per cent in the three months to February when taking soaring inflation into account as measured by the Consumer Prices Index (CPI) – the steepest fall since August to October 2013.

In February alone, real regular wages dropped 2.1 per cent which was the biggest drop since August 2013, the ONS added.

While pay rose 4 per cent in the quarter, it was far outstripped by inflation and experts have warned wages will lag even further behind rising prices this year as inflation is expected to rocket in the autumn.

The latest ONS labour market data also revealed another rise in the number of UK workers on payrolls, up by 35,000 between February and March to 29.6 million.

But this was the smallest monthly increase since February last year while vacancies also saw the smallest rise since February to April 2021, up 50,200 at a record 1.29 million in January to March.

Darren Morgan, director of economic statistics at the Office for National Statistics (ONS), said: ‘While strong bonuses continue to mitigate the effects of rising prices on people’s total earnings, basic pay is now falling noticeably in real terms.’

The Office for National Statistics said that basic pay was now 'falling noticeably in real terms' as the cost of living rises sharply.

The Office for National Statistics said that basic pay was now 'falling noticeably in real terms' as the cost of living rises sharply.

The Office for National Statistics said that basic pay was now ‘falling noticeably in real terms’ as the cost of living rises sharply.

Mr Sunak said: 'Today's stats show the continued strength of our jobs market, with the number of employees on payrolls rising once again in March and unemployment falling further below pre-pandemic levels.'

Mr Sunak said: 'Today's stats show the continued strength of our jobs market, with the number of employees on payrolls rising once again in March and unemployment falling further below pre-pandemic levels.'

Mr Sunak said: ‘Today’s stats show the continued strength of our jobs market, with the number of employees on payrolls rising once again in March and unemployment falling further below pre-pandemic levels.’

There were 86,000 fewer jobless Britons at 1.3 million in the quarter to February, while those in employment rose 10,000 to 32.5 million.

More timely pay as you earn (PAYE) data showed there was another rise in the number of UK workers on payrolls last month, up by 35,000 between February and March to 29.6 million.

But there were signs of easing demand for staff, with this marking the smallest monthly increase since February last year.

Vacancies also saw the smallest rise since February to April 2021, up 50,200, but hit another record high of 1.29 million in January to March.

And a shrinking labour market, due mostly to older workers choosing to retire early throughout the pandemic, has also seen those classed as economically inactive rise by 76,000 in the quarter to 8.9 million.

The figures come amid forecasts that inflation will peak at nearly 9 per cent this autumn, with official data on Wednesday set to show another steep rise in the CPI.

The latest data from the ONS marks the calm before the storm, ahead of April’s energy cap rise, council tax bills increase and the national insurance contribution rise.

The UK’s economic forecasters, the Office for Budget Responsibility (OBR), recently warned that households will suffer the biggest fall in real incomes since records began in 1956, with a drop of more than 2.2 per cent this year.

Mr Sunak said: ‘Today’s stats show the continued strength of our jobs market, with the number of employees on payrolls rising once again in March and unemployment falling further below pre-pandemic levels.’ 

But shadow chief secretary to the Treasury Pat McFadden replied: ‘Today’s figures show that Conservative choices are leaving real wages squeezed and people worse off.

‘At a time like this, Rishi Sunak could have chosen a one-off windfall tax on huge oil and gas company profits to cut household energy bills by up to £600.

‘Instead, he’s decided to make Britain the only major economy to land working people with higher taxes in the midst of a cost of living crisis.’

Official figures showed GDP increased by just 0.1 per cent as the cost of living crisis began to bite, compared to the robust 0.8 per cent seen in January

Official figures showed GDP increased by just 0.1 per cent as the cost of living crisis began to bite, compared to the robust 0.8 per cent seen in January

Official figures showed GDP increased by just 0.1 per cent as the cost of living crisis began to bite, compared to the robust 0.8 per cent seen in January

It comes after figures yesterday suggested the Uk is heading for stagflation – when costs rise but the economy does not grow in lockstep.

Official figures showed GDP increased by just 0.1 per cent in February as the cost of living crisis began to bite, worse than the 0.3 per cent anticipated and far below the robust 0.8 per cent seen in January. 

The gloomy data came even before the Russian invasion of Ukraine threw the global situation into chaos and sent oil and gas prices spiralling higher.

Experts warned it is likely to be the start of a ‘prolonged period of considerably weaker growth’ – while inflation is predicted to keep rising, possibly into double digits. 

Chancellor Rishi Sunak – who is struggling to contain a furore over his family’s tax affairs – welcomed the fact the economy stayed in positive territory.

But he cautioned that while the ‘robust’ response to Vladimir Putin’s aggression was right it would create ‘additional economic uncertainty’.   

Source: Daily Mail

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