The Office for National Statistics (ONS) has revealed that regular wages excluding bonuses fell 3.7% in the three months to May compared to the rate of consumer price index inflation ( CPI), which represents the largest drop in more than 20 years.
Current compensation, excluding bonuses, increased slightly to 4.3% over the period without taking inflation into account.
This comes after CPI inflation hit a 40-year high of 9.1% in May and is expected to hit 11% later this year.
The pressure on wages came as official figures showed the number of UK workers on payroll rose by 31,000 between May and June to 29.6million.
ONS head of labor market and household statistics David Freeman said: “Today’s figures continue to suggest a mixed picture for the labor market.
“The number of people in employment remains below pre-pandemic levels and, while the number of people who are not working and not looking for work is falling, it remains well above what he was before Covid-19 hit.
“With labor demand still very high, unemployment fell again, employment rose and there was a new record high in layoffs.
“Following the recent rises in inflation, wages are now clearly falling in real terms, including and excluding bonuses.”