A tough year ahead for public sector wages | Letter

Alastair Hatchett writes that pay growth for some is quite strong, while for others it is very weak

The forthcoming economic crisis analysed by the Resolution Foundation (UK households warned of year of the squeeze' as cost of living soars, 29 December) is partly based on a view that wage growth is stagnant. This is true for a wide range of employees but not necessarily for all. In fact, earnings growth in the year to October was 4.9%, matching consumer price index inflation, in part buoyed up by labour market shortages. If we follow the Office for National Statistics' breakdown of sectors, average earnings in the private sector grew by 5.4% in the year to October, while in the public sector the growth rate was 2.7%. So 2022 is set to be yet another tough year for public sector employees.

Further analysis of the different parts of the private sector shows average earnings growing by 7.7% in the finance and business services sector, contrasting with a low rate of 2.8% in manufacturing. Pay growth for some is quite strong, while for others it is very weak and certainly below the rate of inflation.
Alastair Hatchett
Incomes Data Research