'Top earners in London have pulled away whilst middle earners have seen little pay growth'

Over the last few weeks and months we’ve heard a lot from Tory politicians and the Bank of England, urging pay restraint among hard-pressed public workers, warning that pay rises could cause yet further inflation.

Yet new data from the IFS shows that in the capital, the highest earners are the ones who have reaped the biggest pay raises since the start of the pandemic, widening the gap between the richest and poorest people in the UK for the first time in two decades.

According to IFS data, earnings for workers in the capital have increased 5% to £4,400 a month before tax since February 2020, which is almost double the 2.7% national average.

The sectors with the highest pay increases were in business services including finance, accounting and law.

Meanwhile, the median income went up just 1.7% to £2,700 a month.

Yet Tory politicians and the Bank of England have had very little to say about those at the top and their pay rises, concerning themselves more with public sector workers who are struggling to make ends meet.

“Top earners in London have pulled away whilst middle earners have seen little pay growth, leading to an increase in earnings inequality within London,” Xiaowei Xu, a senior researcher at the IFS, said in a report Tuesday. The increase for those on more modest pay “is low by both national and historical standards.”

Meanwhile, last month the IMF has also claimed that ‘rising corporate profits account for almost half the increase in Europe’s inflation over the past two years as companies increased prices by more than spiking costs of imported energy.”

The current level of inflation has little to do then with hard-pressed workers demanding pay rises.

Basit Mahmood is editor of Left Foot Forward

Comments are closed.