Official figures show wage growth slowed just as inflation climbed to a 10-year high. Growth in average total pay (including bonuses) was 4.2% and growth in regular pay (excluding bonuses) was 3.8% among employees in September to November 2021. Meanwhile inflation jumped to 5.1% in November.

The ONS calculated that in real terms (adjusted for inflation), total and regular pay have shown minimal growth in September to November 2021, at 0.4% for total pay and 0% for regular pay. Single-month growth in real average weekly earnings for November 2021 fell on the year for the first time since July 2020, at negative 0.9% for total pay and negative 1% for regular pay.

On the plus side, ONS estimates for September to November 2021 show a continuing recovery in the labour market, with an increase in the employment rate and a decrease in the unemployment rate compared with the previous three-month period (June to August 2021).

The UK employment rate was estimated at 75.5%, 1.1 percentage points lower than before the coronavirus pandemic (December 2019 to February 2020), but 0.2 percentage points higher than the previous three-month period (June to August 2021).

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “Inflation has waged war on pay and in November, salaries actually slid once inflation was taken into account. This has piled on the pressure for those struggling through the cost of living crisis, and things are going to get even worse.

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“Wage rises have been falling steadily since spring 2021. Annual rises peaked at this point at 7.3% for regular pay and 8.8% for total pay, thanks to the fact that during the previous spring, wages had plummeted during the first lockdown. Meanwhile, inflation has ramped up from below 1% in February 2021 to more than 5% nine months later. In November, with inflation at 5.1%, it overtook wages.

“This has been devastating for anyone whose finances were already on a knife edge. We’ll get inflation figures for December tomorrow, but there’s every chance we’ll see it rise again – pushed up by not just by runaway energy and petrol prices, but relentless increases in the price of almost everything – from fresh food to home repairs. It means wages after inflation may well continue to fall through the end of 2021 and the beginning of 2022. For those whose budgets are under pressure, it’s a sure sign that things are set to get even worse.”