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UK salaries less than they were 12 years ago, official figures reveal

Published 26/10/2016

As the gender pay gap remains stubbornly wide, experts warn inflation caused by Brexit will keep real wages low
As the gender pay gap remains stubbornly wide, experts warn inflation caused by Brexit will keep real wages low

Wages for average UK workers are less than they were 12 years ago, even after taking inflation into account, shocking official figures reveal.

The gender pay gap also remains stubbornly high, data from the Office of National Statistics showed.

The median full-time worker is now paid £539 per week (£28,028 a year), less than the £555 per week they earned in 2004. Despite a 1.9 per cent salary increase this year, annual average earnings are still around £1,600 less than their 2009 peak.

Earnings for the lowest paid rose 5.9 per cent, faster than any other group last year, meaning wage inequality decreased slightly. The ONS said this was a result of the introduction of the National Living Wage on 1 April.

The pay gap between men and women narrowed slightly from 9.6 per cent to 9.4 per cent – the lowest since the survey began in 1997 – but the gap has remained stubbornly wide during this time. The gender gap for the highest earners is still 20 per cent.

Experts warned that inflation caused by the weakened pound, as well as economic uncertainty after the Brexit vote would keep real earnings low.

Debbie Abrahams, Labour's shadow work and pensions secretary, said: “The figures are yet more disappointing news for working people, with real earnings still below their pre-recession peak in 2008 and the number of people stuck in low-paid jobs increasing by 66 per cent on last year.”

Laura Gardiner, senior policy analyst at the Resolution Foundation welcomed the introduction of the National Living Wage and the narrowing of the gender pay gap but warned Brexit could have a severe impact on wages.

“While 2016 has been the strongest year for pay in over five years, we may not see this level of growth again this Parliament given the outlook for lower earnings growth and higher inflation in the wake of the Brexit vote.

“It is encouraging to see pay finally recovering after a long and painful squeeze but with the pace of recovery set to slow, it could be another decade before we see a return to pre-crash pay levels.”

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