“The Bank’s [the Bank of England] headline forecasts for the fourth quarter of this year show CPI inflation at 13.0 per cent and nominal pay growth of 5.25 per cent, this means real pay will decline by 7.75 per cent,” the TUC said in a statement.
A larger difference between the inflation rate and the rate of income growth was observed only in 1922 and was 13.3%, which was due to the difficult economic situation after World War I, the TUC added.
According to the TUC, the second biggest gap was observed in the first quarter of 1940, when inflation exceeded the wage growth rate by 7.2%.
Over the past months, the sanctions imposed by the West on Russia in retaliation for the special military operation in Ukraine sent food and energy prices soaring, triggering record-high inflation in some countries. In the UK, rising costs of living hit millions of households.
In mid-July, the TUC reported that real incomes of Britons could fall by 6.2% over the next two years, which is the lowest among the G7 countries.
Last week, the Bank of England announced that it had increased the key rate at the maximum pace since 1995 by 0.5 percentage points to 1.75%, and upgraded the inflation forecast for 2022 from 10.25% to 13%.