Real terms pay in the UK: how do salaries compare to inflation across regions?

Londoners saw their pay increase by more than 5% after inflation in the three months to June, as workers elsewhere in the country experienced significant real-terms salary cuts, analysis by NationalWorld reveals.

On Tuesday the Office for National Statistics (ONS) released figures showing UK workers had experienced their sharpest pay slump since records began in 2001.

Wages excluding bonuses fell by 4.1% year on year during April to June, once the Consumer Prices Index (CPI) measure of inflation is taken into account.

A regional breakdown is not available for these exact figures.

But NationalWorld has taken separate regional figures published simultaneously by the ONS showing gross weekly earnings for full-time employees, and adjusted them for inflation in the same way using the CPI. The figures are self-reported earnings, based on a survey of workers.

The analysis shows earnings across April to June were down by an average of 1.2% in real terms compared to a year earlier.

The average full-time worker reported having gross weekly earnings of £727 between April and June this year. Gross earnings means before any deductions are made, such as tax or national insurance.

But a year earlier salaries were the equivalent of £736 in today’s prices. The figures represent mean rather than median earnings.

Which regions have seen the biggest drop in earnings?

It was not an equal picture across the UK however, with London, Scotland and the South West all seeing year-on-year real-terms rises.

Full-time workers in London saw their average earnings rise from £902 (in 2022 prices) to £948, an increase of 5.1%.

The map below shows the figures for every region. Can’t see the map? Click here to open it in a new window.

In Scotland they were up 1%, from £690 to £697, while in the South West they were up 2.8%, from £687 to £706.

The deepest pay decreases were felt in Northern Ireland, with earnings down by 8.3% from £640 to £587.

The regional ONS figures used by NationalWorld are less reliable than the national-level statistics, as they are based on a survey of employees rather than employers.

Workers are asked what they earned in the previous week, and some may include bonuses, while others may not.

Pay levels in the employee survey are also known to be an underestimate, the ONS said – although it does not suggest this affects some regions more than others.

There are no other regional figures yet available for 2022, however.

On Wednesday (17 August) the ONS released the latest CPI figures, showing inflation rising to 10.1% in July compared to a year earlier.

In June inflation had stood at 9.4%.