Wages are failing to keep pace with the rising cost of living – households should prepare for the worst

While it might be good news that the employment market has recovered, in general economic terms there’s little room for cheer in 2022, writes Anna Isaac

Households are feeling the squeeze over rising prices (PA Archive)

The squeeze on British living standards has deepened – with official figures showing that basic pay is being outstripped by rising prices.

Disregarding bonuses, and factoring in inflation – the pace at which prices rise in the economy – show that wages fell by 1 per cent year-on-year in the three months to January, according to the Office for National Statistics (ONS).

Meanwhile, inflation is set to rise further in the months ahead, with the energy price cap in April set to rise by more than 50 per cent, and a National Insurance tax rise of around 10 per cent.