The new figures will mobilize union leaders who are threatening to strike if the government confirms on Tuesday that it will keep pay rises below 5 per cent at a time when inflation is soaring above 9 per cent. Unions representing teachers, health workers and civil servants have warned of widespread disruption if ministers approve further real-terms pay cuts for next year. Patrick Roach, general secretary of the NASUWT teachers’ union, accused ministers of “contempt” for public sector workers. “If the government is hoping that teachers’ anger will dissipate during the summer holidays, it is wrong,” he said. “Teachers have been badly let down by this government for more than a decade.” The figures, released by the Office for National Statistics on Tuesday, showed a sharp gap between private and public sector workers. Overall pay growth of 7.2 percent in the private sector was nearly five times the rate of 1.5 percent in the public sector. The data showed hiring remained strong despite mounting pressures from high energy prices and the rising cost of living, with the employment rate 0.4 percentage points higher in the quarter to May than in the previous quarter, at 75. 9%. The unemployment rate remained steady at 3.8 percent from a month earlier – below the pre-coronavirus pandemic level – even as more people joined the workforce, with economic inactivity falling by 0.4 percentage points on Semester. The number of unfilled jobs rose to a record 1.294 million, although the Office for National Statistics said the pace of job growth had slowed. Layoffs remained at an all-time low. Kitty Ussher, chief economist at the Institute of Directors, said companies struggling to fill vacancies would be encouraged by “early signs” of people who had left the workforce starting to return. However, he added that there was nothing in the evidence to prevent the Bank of England from continuing to raise interest rates at its meeting in early August. The ONS reported that growth in average weekly earnings, including bonuses, was 6.2 per cent in the three months to May, equivalent to a real pay cut of 0.9 per cent. A rise in regular weekly earnings of 4.3% equates to a 2.8% drop in wages in real terms — a record drop. The ONS noted that these figures were slightly skewed by a comparison with a period when many people were on leave, but said this was not as high as earlier in the coronavirus pandemic. Nadhim Zahawi, the UK chancellor, said the figures were “encouraging in uncertain times”, adding that the government was helping households with the rising cost of living through grants and tax cuts, while working with the Bank of England to reduce inflation.

The tight labor market has given some workers more bargaining power, allowing them to secure larger wage increases that at least partially offset the squeeze on household incomes caused by rising inflation. “It’s markets, not militancy, that are pushing wages higher,” said Tony Wilson, director of the Institute for Employment Studies, adding that labor costs were a key factor in the price hike. But Samuel Tombs at consultancy Pantheon Macroeconomics said the data would reduce pressure on the BoE to step up the pace of monetary tightening. He argued that this was because the data showed a slowdown in overall wage growth, a recovery in labor supply and a stabilization in demand for workers, with unemployment in the second quarter likely to exceed the central bank’s forecasts.