International Business News – British workers are struggling to cope with the biggest drop in wages in more than two decades as food and energy prices have risen sharply, official figures released Tuesday night, Singapore time 19, showed.
According to data released Tuesday by the Office for National Statistics (ONS), the real wages of British workers – that is, workers’ wages adjusted for inflation – fell 2.8 percent from March to May compared with the same period last year. That’s the biggest drop since the ONS began recording the data in 2001.
Earlier this month, British Prime Minister Boris Johnson resigned amid a series of ethics scandals that cost the Johnson administration too much to ignore. His successor will also face a daunting set of economic and financial challenges.
For months, rising global energy and commodity prices have fueled global inflation, and the Russia-Ukraine conflict has added to the situation. The U.K. is the world’s fifth-largest economy, and the country has been one of the most severely affected by inflation among the world’s richest countries.
Britain’s consumer price index (CPI) rose 9.1 percent in May, a 40-year high and the highest level of inflation among G7 countries. The country’s CPI increase is expected to climb to more than 11 percent later this year, despite a series of interest rate hikes in the U.K.
British families are also feeling the pressure of inflation. Mind-boggling energy and grocery expenses have plunged Britons into the worst cost-of-living crisis in decades. This year, the Bank of England estimates that Britons will see the second-largest annual drop in disposable income since records began in 1964.
According to data released Tuesday by research firm Kantar, inflation on Britons’ grocery bills reached nearly 10 percent in the four weeks ending July 10. That means the average Briton will spend an extra 454 pounds ($545) on food and necessities this year.
And according to energy research firm Cornwall Insight, the average energy bill for millions of British households is estimated to be more than £3,000 ($3,603) in the year beginning in October. In April this year, Britons’ energy bills soared by 54 percent. The U.K. government will adjust the energy price cap each October to limit the amount suppliers can charge customers per unit of energy.