Public sector staff hit as price rises outpace pay

By Dearbail Jordan, Business reporter, BBC News

Public sector pay for jobs such as NHS workers, teachers and civil servants fell further behind price rises in the three months to February, figures show.

While wages rose for public sector workers, price rises outpaced pay meaning a 3% drop in spending power for public sector staff. In contrast, an average private sector employee’s wage bought 0.5% less.

The latest inflation figures show the cost of living is rising at its fastest pace for 30 years. “Basic pay is now falling noticeably in real terms,” said Darren Morgan from the Office for National Statistics describing the fall in spending power.

The most recent figures show that inflation reached 6.2% in February and new data, due out on Wednesday, is expected to show a further rise in March.

Tom Southern, a recruitment consultant from Macclesfield, says he and family are having to make cutbacks because of the rising cost of living. The 30-year-old says he recently moved jobs to get a better salary, but it still does not go far enough.

“We’re not massively uncomfortable, we have a house and two cars. But it’s the little cutbacks you have to make, it starts to add up.”

The father of three says it costs £1.80 a litre to put diesel in the family car and their energy bill has gone from £69 to £268 a month. Their weekly shop at Aldi is up from £50-60 to £80-90.

Tom and his partner, who is a midwife, also have loans to pay, childcare costs, and are getting married this month which is another bill to pay.

“I don’t see myself as unfortunate, it’s other people I feel sorry for,” he says. “I don’t see how single parents or people on a low wage can make ends meet.”

The ONS said the unemployment rate fell to 3.8% from 3.9% last month. Capital Economics said the fall in unemployment was mainly due to people taking themselves out of the workforce by retiring or by looking after family or long-term sick.

Ruth Gregory, senior UK economist at Capital Economics, said the number of people classed as inactive rose by 76,000 in the three month period.

Source: bbc.com