UK living standards squeeze will intensify as real pay plunges

Analysis: Rising inflation likely to lead to more strikes and falling spending unless government acts

Forget talk of a return to the inflationary spirals of the 1970s. The real story of Britain's labour market is of an intensifying squeeze on living standards as the gap between pay and the cost of living widens.

Real regular pay - wages adjusted for prices once bonus payments have been stripped out - were 2.8% lower in the three months to May than in the same period of 2021. Not only was that the sixth monthly decline in a row, it was the biggest drop since modern records began in 2001.