Wages decline at record rate
Average weekly earnings fell by 5.8 per cent in February, the Office for National Statistics (ONS) has reported.
It was the biggest drop since the ONS began issuing wages data in 2001, coming on top of a decline of 1.9 per cent in the previous month.
Bonuses in the financial sector were hardest hit and accounted for a significant proportion of the fall.
But other areas of the economy, such as manufacturing and leisure, also suffered as a result of plummeting bonuses.
Wage freezes and cuts elsewhere in the private sector played a part in the huge drop, too.
However, analysts said that the scale of the fall could be explained by the large number of private sector pay settlements that are concluded in the opening months of the year and suggested that some increases would be reinstated later.
John Philpott, chief economist at the Chartered Institute of Personnel and Development, took a gloomier view, though.
He said: “Bonuses have virtually dried up in the private sector this year as employers cut costs and staff try to hold onto their jobs. Add the arrival of price deflation into the mix, and the chances are that growth in regular pay (excluding bonuses) will also show signs of a further marked slump in the coming months.”