Inflation dropped off slightly in the year to March 2023, but still remains above 10%.
According to the Office for National Statistics (ONS) the consumer prices index (CPI) rose by 10.1% in the 12 months to March 2023, down from 10.4% in February. On a monthly basis, CPI rose by 0.8% in March 2023.
The retail prices index (RPI), the figure most trade unions base their pay negotiations on but no longer an official statistic used by the ONS, was 13.5% in the year to March 2023, down slightly from the February 2023 figure (13.8%), but still high compared with historical levels.
CPI including owner occupiers’ housing costs (CPIH) rose by 8.9% in the 12 months to March 2023, down from 9.2% in February.
Pay rises are failing to keep pace with inflation, according to data from recruitment agency Aspire. Nearly four in 10 people who responded to its survey had not received a pay rise in the past 12 months, and less than a quarter of those who had saw it rise in line with inflation. The most common pay settlement was 5%, awarded to 52% of workers who saw a pay rise.
Inflation in March 2023
Pay awards expected to drop back to 5%
Aspire’s global MD Terry Payne, said: “Whether it’s mortgage payments or energy bills, the increased cost of living means that people are exploring their options job-wise. And if they haven’t received a pay rise recently – or if it’s not enough to keep pace with soaring costs – then it’s only natural that workers will look elsewhere.
“The good news is that there are plenty of well-paid opportunities out there, as many employers offer attractive starting salaries to hire the talent they need. And we’re certainly noticing a gradual rise in the number of people looking to capitalise on what is a really lively jobs market. At last count, there were well over a million job vacancies in the UK, which says it all.
“You have to sympathise with employers, though. With costs rising across the board, increasing pay is often easier said than done. In this economic climate, businesses unable to compete on pay need to think creatively, exploring different ways to attract the talent they need – from highlighting diversity and inclusion to offering unrivalled flexible working opportunities.”
Chieu Cao, CEO of financial wellbeing platform Mintago, said: “It’s poignant that today’s inflation data comes right in the middle of Stress Awareness Month. While prices are falling again, we cannot underestimate the huge impact the cost-of-living crisis is having on people’s financial wellbeing and, in turn, their mental health.
“It’s more important than ever that people are given the tools they need to navigate an extremely challenging economic climate. This is best done in the workplace, where not enough support is being provided.”
Mintago’s survey of over 1,000 UK employees showed that 51% have experienced a notable increase in the stress levels owing to the cost-of-living crisis.
It’s more important than ever that people are given the tools they need to navigate an extremely challenging economic climate.” – Chieu Cao, Mintago
As industrial action over pay in many sectors rumbles on, TUC general secretary Paul Nowak said the government needed to do more to support cash-strapped workers.
“With prices still rising much faster than wages, working families are desperate for better news on pay. But Rishi Sunak is dragging his heels on meaningful negotiations to resolve pay disputes. And yet he goes easy on the oil and gas giants treating families like cash machines,” he said.
“Sunak has his priorities wrong – his government should reward work, not wealth. We need negotiations to settle the current disputes, and a plan to get wages rising across the economy.”
James Smith, research director at the Resolution Foundation think tank, said: “Many countries have experienced big recent falls in prices pressures, but Britain has not followed suit and remains mired in double digit inflation.
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“Headline inflation should fall sharply next month as the effect of last April’s energy price spike falls out of the data. But the acceleration of food price inflation to nearly 20 per cent is a major cause for concern, particularly for low-income families who spend a far greater share of their income on food than richer households.”
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