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Economy · Pay · Great Britain · 2001–2025

What happened to pay?

Average weekly pay after inflation was 23.7% higher in 2025 than in 2000, but only 4.6% above its 2007 pre-crash level — a fall to 2014, a slow recovery, a second squeeze in 2022–23 and modest growth since. In the three months to July 2026, real pay was +0.9% on a year earlier.

Evidence last reviewed 3 October 2026

Then and now UK Facts calculation from official data

1996 → 2025 · Pay: Great Britain · Prices: UK

A bigger pay packet. A harder home to buy.

Using typical full-time pay, John’s wage rises from £301 to £767 a week. After average inflation, that buys roughly £160 more each week before tax. But buying a home, gas and electricity take a bigger share of pay.

John is fictional. The figures compare national benchmarks, not one person’s actual finances.

1996: John, earlier picture
John in 1996, younger, in a tiled kitchen. Typical full-time gross pay £301 a week; prices and methods are transcribed below.
View full-size image: John, 1996

John, 1996

John in 1996, younger, in a tiled kitchen. Typical full-time gross pay £301 a week; prices and methods are transcribed below.Read the text in this picture (1996)
2025: John, later picture
Older John in a different dining room in 2025. Typical gross pay £767; real gross purchasing power £160 a week higher (+26%), before tax.
View full-size image: John, 2025

John, 2025

Older John in a different dining room in 2025. Typical gross pay £767; real gross purchasing power £160 a week higher (+26%), before tax.Read the text in this picture (2025)

£160 a week more buying power (+26%)

Inflation-adjusted gross pay, before tax, in 2025 money. Not cash left after bills.

  • Home purchase price: 3.4 years of annualised pay in 1996; 6.7 in 2025.
  • Food and petrol: more purchasing power. Gas, electricity and lager: less.

This illustration uses median full-time pay from 1996; the charts below use average weekly earnings and different starting years.

Sources and calculations: John, 1996 vs 2025

Published median full-time gross weekly pay for Great Britain in 1996 and 2025, compared with UK prices in the same years. A median is the middle value: half of full-time employees earned more, half less.

John’s overall comparison: pay, inflation and the price of a home
Measure19962025Shown as
Gross weekly pay, GB median, full-time (April)£301.10£766.60£301 and £767
CPIH all-items index, annual average (2015 = 100)68.5138.0—
Weekly pay in 2025 money (CPIH)£606.60£766.60£160 a week more (+26%)
UK average house purchase price (mean of 12 months)£53,415.25£267,281.25£53,400 and £267,300
House price ÷ (weekly pay × 52)3.41156.70503.4 and 6.7 years · worse
Item by item: how much of each a week’s gross pay buys, 1996 and 2025
Item19962025Pay buys
Food shop (illustrative £50 basket)£50£107.69 (shown as £108)18% more · better
Electricity (illustrative £20 amount)£20£79.18 (shown as £79)36% less · worse
Gas (illustrative £20 amount)£20£91.77 (shown as £92)45% less · worse
Unleaded petrol, per litre56p (1996 annual average)£1.37 (January 2025)4% more · better
Draught lager, per pint£1.73 (1996 annual average)£4.83 (January 2025)9% fewer pints · worse

Food, electricity and gas amounts are chosen illustrative amounts repriced with ONS CPI indices (food 65.7 → 141.5, electricity 48.7 → 192.8, gas 32.8 → 150.5; 2015 = 100). They are not measured weekly household budgets. Petrol and lager compare published average prices for 1996 with January 2025, the last observation in the series consulted.

How it is calculated

  1. 1996 pay in 2025 prices = £301.10 × 138.0 ÷ 68.5 = £606.5956204.
  2. Gain = £766.60 − £606.5956204 = £160.0043796 a week.
  3. Percentage = (£766.60 ÷ £606.5956204 − 1) × 100 = 26.3774373%.
  4. Rounded only for display: about £160 a week and +26%.
  5. Item verdicts: change in the quantity a week’s pay buys = ((2025 pay ÷ 1996 pay) ÷ (2025 price ÷ 1996 price) − 1) × 100, from unrounded values. This is not the change in the share of pay spent on the item.

Definitions, geography and dates

  • Pay: ONS published GB median gross weekly earnings of adult full-time employees whose pay was not affected by absence, April of each year (New Earnings Survey 1996, Annual Survey of Hours and Earnings 2025). Not an age-specific median and not the same people followed over time.
  • Prices: UK. Annual-average CPIH is used with each year’s April earnings benchmark, matching the annual price comparisons in the images.
  • ONS survey coverage and methods changed between 1996 and 2025 (NES to ASHE, occupational classifications). This is an approximate comparison of published levels, not a fully method-adjusted continuous pay series.
  • CPIH includes owner-occupiers’ housing consumption costs (what a home would cost to rent). It does not use house purchase prices or deposits, which is why the home price is shown separately.
  • The house price is the UK House Price Index average acquisition price, a mean of the 12 monthly United Kingdom figures in each year; before full national coverage the official derived back series is used. Annual pay is weekly pay × 52 for this illustration, not ONS’s separately published annual earnings.
  • This page’s charts use mean Average Weekly Earnings (ONS A3WX) from 2000 or 2007; John uses median full-time pay from 1996. The two are not combined, and the page’s +4.6% since 2007 is unchanged.

What this does not show

  • The £160 is a gross-pay purchasing-power comparison using the whole CPIH basket. It is not net pay, disposable income, spare cash or saving, and it is not a total of the six item verdicts.
  • No pension, tax, National Insurance, benefits, mortgage balance or actual household budget is modelled.
  • Someone who bought a home in 1996 is not assumed to take out a new 2025 mortgage by ageing. No individual mortgage, tenure, wealth or savings history is known.
  • Petrol and lager are published average prices; products and outlets change over time, so these are not identical-product indices. Petrol is unleaded and beer is draught lager, not all beer. The 4% petrol improvement is small and sensitive to the period chosen.
  • John’s UK average house price and GB annualised weekly pay are a different benchmark from the housing story’s England median home and annual pay. The two stories must not be combined into one series.

Sources

Cells used: ONS earnings workbook: GB Median Time-series!AB41 (1996) and AB80 (2025). CPIH L522, annual 1996 and 2025. UK HPI: 12 monthly United Kingdom average prices in each year, averaged here.

Text of the two pictures

The people are fictional and the portraits are AI-generated. The pictures and these figures are a dated snapshot approved on 4 October 2026; they are updated together, never one without the other.

1996 picture

Large 1996 data-year label. Younger John in a 1990s tiled kitchen, navy jumper and mug. Fictional young John, 1996. Typical GB full-time gross weekly pay £301. UK average home £53,400, equivalent to 3.4 years of annualised pay. Illustrative food shop £50, electricity £20 and gas £20. Unleaded petrol 56p per litre and draught lager £1.73 per pint.

Text in the picture

  • UK Statpack. Data year 1996.
  • John. £301 a week. Typical full-time pay • before tax.
  • What did his money buy?
  • Buying a home: £53,400. UK average price • 3.4 years’ gross pay.
  • Food shop: £50. Illustrative food basket.
  • Electricity: £20. Illustrative amount.
  • Gas: £20. Illustrative amount.
  • Petrol: 56p / litre. Unleaded • 1996 average.
  • A pint of lager: £1.73. Draught lager • 1996 average.
  • John is fictional. Pay: GB median. Prices: UK, 1996 annual averages. Food and energy amounts are illustrative, not a household budget. Sources: ONS earnings and prices; UK House Price Index.
  • UK-STATPACK.CO.UK

2025 picture

Large 2025 data-year label. Recognisably older John with greyer hair and beard, olive overshirt, seated beside a window in a different dining room. Older John in a 2025 comparison. Gross weekly pay £767. Item verdicts: home purchase worse, food better, electricity and gas worse, petrol better and lager worse. Overall real gross pay is about £160 a week higher, or 26%, after CPIH inflation, before tax and in 2025 pounds. This is a national benchmark, not spare cash after bills.

Text in the picture

  • UK Statpack. Data year 2025.
  • John. £767 a week. Typical full-time pay • before tax.
  • Better or worse than 1996?
  • Buying a home: £267,300. Worse: 3.4 → 6.7 years’ gross pay.
  • Food shop: £108. Better: pay buys 18% more.
  • Electricity: £79. Worse: pay buys 36% less.
  • Gas: £92. Worse: pay buys 45% less.
  • Petrol: £1.37 / litre (January 2025). Better: pay buys 4% more.
  • A pint of lager: £4.83 (January 2025). Worse: pay buys 9% fewer pints.
  • John’s real gross pay: £160 a week better off (+26%). After ONS average inflation • before tax • in 2025 money.
  • John is fictional. Overall result uses CPIH inflation, not a household budget. Item verdicts compare gross-pay purchasing power with 1996. 2025 annual prices, except petrol and lager: January 2025. Sources: ONS earnings, CPI and CPIH; UK House Price Index.
  • UK-STATPACK.CO.UK

1. Two squeezes since 2008

Average weekly pay including bonuses rose from £427 a week in 2000 to £505 in 2007 at 2015 prices — 18.3% in seven years. It did not fall at once: real pay held up in 2008, then slipped for six years to £473 in 2014, as wage rises lagged behind prices. It first passed the 2007 level in 2021, and the 2022–23 inflation shock then pushed it back. In 2025 it was £528, 4.6% above 2007 and 23.7% above 2000. What a week’s pay buys in essential bills.

When was pay falling behind prices?

Real pay fell year on year in 99 of the last 305 three-month periods

Change in average weekly earnings (total pay, whole economy) on a year earlier, adjusted for prices (CPIH) by ONS, three-month averages, Great Britain, Jan–Mar 2001 to May–Jul 2026.

Great Britain · Jan–Mar 2001 to May–Jul 2026

1996–2026 displayed window · observations only. Shading marks years outside the displayed record.

% change on a year earlier, after inflationNo observations shown-10%-5%0%5%10%200020102020No change in buying power0.9%
The longest stretch of falling real pay ran from Mar–May 2010 to Dec 2013–Feb 2014 (46 consecutive readings). The lowest reading was −5.5% in Jan–Mar 2009. A second squeeze ran from Mar–May 2022 to Mar–May 2023. Real pay is growing again (+0.9% in May–Jul 2026), below the 2.4% average of 2001–2007. The chart shows growth rates, so a return above zero does not recover what was lost.

Great Britain · Jan–Mar 2001 to May–Jul 2026 · Official statistics; the latest months are often revised

Sources, definitions and data — Real pay fell year on year in 99 of the last 305 three-month periods
Geography:
Great Britain — Employees
Measure:
Per cent change on the same three months a year earlier
Period:
Jan–Mar 2001 to May–Jul 2026
Status:
Official statistics; the latest months are often revised
Calculation:
As published (A3WW). Each point is a three-month average compared with the same three months a year earlier.
Compare with:
Zero: below the line, average pay bought less than a year before
Not included / breaks:
A mean across employees, so changes in who is employed move it: in 2020–21 job losses among lower-paid workers pushed the average up, then reversed. Excludes the self-employed and Northern Ireland.

Source: ONS, Average weekly earnings: real terms growth, total pay, three-month average, series A3WW (released 15 September 2026). Chart ECON-04.

View the data as a table
Three months toReal total pay growth (%)
Jan–Mar 20014.9
Feb–Apr 20014.9
Mar–May 20013.6
Apr–Jun 20013.7
May–Jul 20013.3
Jun–Aug 20013.3
Jul–Sep 20013.0
Aug–Oct 20013.0
Sep–Nov 20013.0
Oct–Dec 20012.8
Nov 2001–Jan 20022.2
Dec 2001–Feb 20021.6
Jan–Mar 20021.2
Feb–Apr 20021.3
Mar–May 20021.7
Apr–Jun 20022.3
May–Jul 20022.5
Jun–Aug 20022.3
Jul–Sep 20022.1
Aug–Oct 20021.6
Sep–Nov 20021.4
Oct–Dec 20021.1
Nov 2002–Jan 20030.9
Dec 2002–Feb 20030.7
Jan–Mar 20031.3
Feb–Apr 20031.5
Mar–May 20031.8
Apr–Jun 20031.3
May–Jul 20031.4
Jun–Aug 20031.6
Jul–Sep 20032.0
Aug–Oct 20032.4
Sep–Nov 20032.6
Oct–Dec 20032.7
Nov 2003–Jan 20043.8
Dec 2003–Feb 20043.5
Jan–Mar 20043.4
Feb–Apr 20042.5
Mar–May 20042.8
Apr–Jun 20042.8
May–Jul 20042.6
Jun–Aug 20042.6
Jul–Sep 20042.7
Aug–Oct 20042.9
Sep–Nov 20042.8
Oct–Dec 20042.7
Nov 2004–Jan 20052.5
Dec 2004–Feb 20052.8
Jan–Mar 20052.6
Feb–Apr 20052.7
Mar–May 20052.4
Apr–Jun 20052.5
May–Jul 20052.5
Jun–Aug 20052.6
Jul–Sep 20052.5
Aug–Oct 20052.3
Sep–Nov 20052.3
Oct–Dec 20052.3
Nov 2005–Jan 20061.9
Dec 2005–Feb 20062.2
Jan–Mar 20062.7
Feb–Apr 20063.1
Mar–May 20062.7
Apr–Jun 20062.4
May–Jul 20062.4
Jun–Aug 20062.1
Jul–Sep 20061.6
Aug–Oct 20061.5
Sep–Nov 20061.6
Oct–Dec 20062.1
Nov 2006–Jan 20072.5
Dec 2006–Feb 20073.3
Jan–Mar 20072.9
Feb–Apr 20072.4
Mar–May 20071.8
Apr–Jun 20071.9
May–Jul 20072.3
Jun–Aug 20072.6
Jul–Sep 20073.2
Aug–Oct 20072.9
Sep–Nov 20072.6
Oct–Dec 20071.7
Nov 2007–Jan 20081.4
Dec 2007–Feb 20081.0
Jan–Mar 20081.6
Feb–Apr 20081.8
Mar–May 20081.7
Apr–Jun 20080.8
May–Jul 2008-0.1
Jun–Aug 2008-0.8
Jul–Sep 2008-1.4
Aug–Oct 2008-1.4
Sep–Nov 2008-1.5
Oct–Dec 2008-1.0
Nov 2008–Jan 2009-2.1
Dec 2008–Feb 2009-4.5
Jan–Mar 2009-5.5
Feb–Apr 2009-4.3
Mar–May 2009-1.9
Apr–Jun 2009-0.9
May–Jul 2009-1.1
Jun–Aug 2009-0.9
Jul–Sep 2009-0.7
Aug–Oct 2009-0.6
Sep–Nov 2009-0.5
Oct–Dec 2009-0.8
Nov 2009–Jan 2010-0.5
Dec 2009–Feb 20101.8
Jan–Mar 20102.0
Feb–Apr 20101.4
Mar–May 2010-1.0
Apr–Jun 2010-1.2
May–Jul 2010-0.9
Jun–Aug 2010-0.8
Jul–Sep 2010-0.6
Aug–Oct 2010-0.6
Sep–Nov 2010-0.7
Oct–Dec 2010-0.9
Nov 2010–Jan 2011-0.3
Dec 2010–Feb 2011-0.6
Jan–Mar 2011-0.6
Feb–Apr 2011-1.5
Mar–May 2011-1.3
Apr–Jun 2011-1.3
May–Jul 2011-1.1
Jun–Aug 2011-1.3
Jul–Sep 2011-1.9
Aug–Oct 2011-2.2
Sep–Nov 2011-2.2
Oct–Dec 2011-2.0
Nov 2011–Jan 2012-2.2
Dec 2011–Feb 2012-2.2
Jan–Mar 2012-2.3
Feb–Apr 2012-1.7
Mar–May 2012-1.3
Apr–Jun 2012-1.0
May–Jul 2012-1.0
Jun–Aug 2012-0.7
Jul–Sep 2012-0.5
Aug–Oct 2012-0.5
Sep–Nov 2012-0.7
Oct–Dec 2012-1.1
Nov 2012–Jan 2013-1.1
Dec 2012–Feb 2013-1.3
Jan–Mar 2013-1.9
Feb–Apr 2013-1.0
Mar–May 2013-0.8
Apr–Jun 2013-0.3
May–Jul 2013-1.3
Jun–Aug 2013-1.6
Jul–Sep 2013-1.6
Aug–Oct 2013-1.4
Sep–Nov 2013-1.2
Oct–Dec 2013-0.9
Nov 2013–Jan 2014-0.6
Dec 2013–Feb 2014-0.1
Jan–Mar 20140.1
Feb–Apr 2014-1.0
Mar–May 2014-1.5
Apr–Jun 2014-1.9
May–Jul 2014-1.2
Jun–Aug 2014-1.0
Jul–Sep 2014-0.6
Aug–Oct 20140.0
Sep–Nov 20140.5
Oct–Dec 20140.9
Nov 2014–Jan 20151.1
Dec 2014–Feb 20151.1
Jan–Mar 20151.9
Feb–Apr 20152.3
Mar–May 20152.7
Apr–Jun 20152.1
May–Jul 20152.4
Jun–Aug 20152.7
Jul–Sep 20152.6
Aug–Oct 20152.1
Sep–Nov 20151.7
Oct–Dec 20151.5
Nov 2015–Jan 20161.6
Dec 2015–Feb 20161.4
Jan–Mar 20161.4
Feb–Apr 20161.4
Mar–May 20161.7
Apr–Jun 20161.9
May–Jul 20161.7
Jun–Aug 20161.6
Jul–Sep 20161.4
Aug–Oct 20161.3
Sep–Nov 20161.3
Oct–Dec 20160.9
Nov 2016–Jan 20170.4
Dec 2016–Feb 20170.1
Jan–Mar 20170.1
Feb–Apr 2017-0.2
Mar–May 2017-0.5
Apr–Jun 2017-0.4
May–Jul 2017-0.3
Jun–Aug 2017-0.3
Jul–Sep 2017-0.4
Aug–Oct 2017-0.2
Sep–Nov 2017-0.3
Oct–Dec 2017-0.2
Nov 2017–Jan 2018-0.2
Dec 2017–Feb 20180.0
Jan–Mar 20180.1
Feb–Apr 20180.3
Mar–May 20180.4
Apr–Jun 20180.3
May–Jul 20180.4
Jun–Aug 20180.6
Jul–Sep 20180.8
Aug–Oct 20181.1
Sep–Nov 20181.2
Oct–Dec 20181.3
Nov 2018–Jan 20191.2
Dec 2018–Feb 20191.3
Jan–Mar 20191.3
Feb–Apr 20191.4
Mar–May 20191.7
Apr–Jun 20192.1
May–Jul 20192.1
Jun–Aug 20191.9
Jul–Sep 20192.0
Aug–Oct 20191.6
Sep–Nov 20191.6
Oct–Dec 20191.2
Nov 2019–Jan 20201.3
Dec 2019–Feb 20200.9
Jan–Mar 20200.5
Feb–Apr 2020-0.4
Mar–May 2020-1.2
Apr–Jun 2020-1.8
May–Jul 2020-1.7
Jun–Aug 2020-0.6
Jul–Sep 20200.7
Aug–Oct 20202.1
Sep–Nov 20203.0
Oct–Dec 20203.8
Nov 2020–Jan 20213.9
Dec 2020–Feb 20213.6
Jan–Mar 20213.2
Feb–Apr 20214.5
Mar–May 20215.8
Apr–Jun 20216.8
May–Jul 20216.2
Jun–Aug 20214.7
Jul–Sep 20213.1
Aug–Oct 20211.7
Sep–Nov 20210.6
Oct–Dec 20210.5
Nov 2021–Jan 20220.4
Dec 2021–Feb 20221.0
Jan–Mar 20221.7
Feb–Apr 20220.6
Mar–May 2022-0.8
Apr–Jun 2022-2.5
May–Jul 2022-2.5
Jun–Aug 2022-2.3
Jul–Sep 2022-2.6
Aug–Oct 2022-2.6
Sep–Nov 2022-2.5
Oct–Dec 2022-2.9
Nov 2022–Jan 2023-2.7
Dec 2022–Feb 2023-2.7
Jan–Mar 2023-2.5
Feb–Apr 2023-1.8
Mar–May 2023-1.1
Apr–Jun 20230.5
May–Jul 20231.2
Jun–Aug 20231.4
Jul–Sep 20231.4
Aug–Oct 20231.3
Sep–Nov 20231.5
Oct–Dec 20231.5
Nov 2023–Jan 20241.6
Dec 2023–Feb 20241.8
Jan–Mar 20241.8
Feb–Apr 20242.1
Mar–May 20242.3
Apr–Jun 20241.8
May–Jul 20241.4
Jun–Aug 20241.1
Jul–Sep 20241.7
Aug–Oct 20242.3
Sep–Nov 20242.3
Oct–Dec 20242.5
Nov 2024–Jan 20252.0
Dec 2024–Feb 20252.1
Jan–Mar 20251.8
Feb–Apr 20251.4
Mar–May 20250.8
Apr–Jun 20250.4
May–Jul 20250.6
Jun–Aug 20250.9
Jul–Sep 20250.8
Aug–Oct 20250.8
Sep–Nov 20250.7
Oct–Dec 20250.5
Nov 2025–Jan 20260.8
Dec 2025–Feb 20260.6
Jan–Mar 20261.1
Feb–Apr 20261.2
Mar–May 20261.2
Apr–Jun 20261.2
May–Jul 20260.9

2. What an average hides

It is a mean, not the typical worker. Average weekly earnings divide total pay by the number of employees, so a relatively small number of high earners pull it up. ONS’s Annual Survey of Hours and Earnings publishes medians, which sit below the mean.

Who is employed changes the average. In 2020 many lower-paid jobs disappeared during the pandemic, which lifted average pay without anyone’s pay rising; the effect reversed as those jobs returned. Part of the jump past the 2007 level in 2021 was this composition effect.

Pay is not household income. Real pay adjusts for prices but does not net off tax, rent, mortgage payments or childcare, and ignores benefits and other earners in the household. Two people on the same pay can have very different amounts left. What households have left.

Which price index. ONS adjusts these figures with CPIH, its lead inflation measure, which includes owner-occupiers’ housing costs. ONS also publishes regular pay excluding bonuses (series A2FC), which gives different levels; this site uses total pay including bonuses (A3WX) throughout. Both show the same pattern: a long fall, then a slow, modest recovery.

Locally, official pay figures are annual, cash-terms and residence-based medians, so they cannot be set against this national weekly real-terms mean. Compare areas on their own terms on the local jobs page.

3. Productivity: the long-run ceiling

Over decades, pay can only rise as fast as the value of what each hour of work produces. Output per hour grew 2.2% a year from 1990 to 2007 and 0.4% a year since. It is shown on its own chart: productivity is deflated by output prices and real pay by consumer prices, so putting them on one axis would imply a comparison the data do not support.

Is each hour of work producing more?

Output per hour grew 2.2% a year before 2007 and 0.4% a year since

Output per hour worked, UK whole economy, annual average of the quarterly index, rebased to 2007 = 100, 1990 to 2025.

United Kingdom · 1990 to 2025

1996–2026 displayed window · observations only. Shading marks years outside the displayed record.

Output per hour worked (2007 = 100)80100120axis does not start at 02000201020202007 = 100106.8
Output per hour is 6.8% above 2007, against 45.9% growth in the 17 years before. Over the long run, productivity sets how fast pay can rise without pushing up prices, which is why the slowdown matters. But the two are measured with different price indices and need not move together year by year, and economists disagree about why productivity slowed.

United Kingdom · 1990 to 2025 · Official statistics; revised with the national accounts

Sources, definitions and data — Output per hour grew 2.2% a year before 2007 and 0.4% a year since
Geography:
United Kingdom — Whole economy
Measure:
Index, 2007 = 100
Period:
1990 to 2025
Status:
Official statistics; revised with the national accounts
Calculation:
Site calculation: the four quarterly LZVB values averaged for each complete year, divided by the 2007 average.
Compare with:
2007 = 100
Not included / breaks:
A whole-economy average; shifts between industries move it. It measures output per hour, not pay, and is deflated by output prices, not consumer prices — so it cannot be put on the same axis as real pay.

Source: ONS, Output per hour worked, UK whole economy, series LZVB. Chart ECON-05.

View the data as a table
YearIndex (2007 = 100)
199068.6
199170.7
199273.0
199375.6
199476.9
199577.6
199679.1
199781.0
199883.0
199984.8
200088.5
200189.7
200291.3
200393.7
200494.8
200596.4
200698.1
2007100.0
200899.7
200998.0
201099.8
2011100.3
2012100.0
201399.7
2014100.1
2015100.5
2016101.5
2017103.5
2018104.2
2019104.1
2020105.6
2021107.1
2022108.0
2023107.6
2024106.8
2025106.8

Competing explanations

Weak productivity. The mainstream view is that pay stalled mainly because output per hour stalled. Why productivity slowed is disputed: the financial crisis and its damage to lending, low business investment, uncertainty after the 2016 referendum, slower spread of new technology and a shift towards lower-productivity work are all candidates, and economists do not agree on the weights.

Price shocks. Both squeezes coincided with inflation driven by import prices — the fall in sterling in 2008 and higher commodity prices in 2010–11, and energy and food in 2022. Import price shocks make the country poorer as a whole, and pay caught up only with a lag.

The share going to pay. Some argue that weaker bargaining power has held pay below productivity. Comparisons are sensitive to which price index and which pay measure are used (pensions and national insurance contributions count as pay costs but not as take-home pay), so this is genuinely contested.

None of these is settled by the charts above. What they do show is that a return to pre-2008 pay growth would need a return to something like pre-2008 productivity growth.

What would change it

Investment incentives, planning reform, skills and cheaper energy — the long-run levers on output per hour — are compared with their owners, costs and evidence in What would move the needle?. For hours, contracts and the jobs market see pay and security.

Sources and methods (4)

Method notes

  • Real pay: ONS Average Weekly Earnings, whole economy, total pay including bonuses, seasonally adjusted, deflated by ONS with CPIH. Great Britain; employees only.
  • Growth figures compare a three-month average with the same three months a year earlier, as ONS publishes them.
  • Output per hour: ONS whole-economy index, averaged over the four quarters of each complete year.