WORKERS took another beating in quarter one as prices increased far faster than wages, official data showed yesterday, which will continue to drag down consumer spending and economic growth.
Pay in the quarter was just 0.6 per cent higher than in the same period of 2011, the Office for National Statistics (ONS) revealed – while prices rose 3.5 per cent in the year to March, leaving the average worker 2.9 per cent worse off.
Bonuses led the slowdown, falling 9.8 per cent, even before inflation is taken into account.
Public sector workers saw average weekly earnings rise 0.3 per cent to £481 – a 3.2 per cent real terms pay cut – and private sector staff saw wages rise 1.3 per cent to £460, a 2.2 per cent real terms fall.
Unemployment fell by 45,000 in the first quarter to 2.63m, while employment jumped 105,000.
However, the number of full time workers fell 13,000 while part time employment rose 118,000.
As a result, economists believe the recovery will remain weak.
“With unemployment still high, people worried about job security and real pay falling, there still seems little prospect that consumer spending will do anything other than act as a drag on the economy,” said Chris Williamson from Markit.