The latest figures from the Office for National Statistics [ONS] show that real terms pay fell by three per cent between April and June.
This is because average wages, which increased by 4.7 per cent over the quarter, did not keep pace with inflation.
Inflation - which rose to 9.4 per cent in the year to June - has been driven up by higher food and fuel costs, as well as substantial energy bills.
The ONS’ director of economic statistics, Darren Morgan, said that the schism between wage rises and inflation was the widest on record and is continuing to open up at a record pace.
He said: “Excluding bonuses, it (the real value of pay) is still dropping faster than at any time since comparable records began in 2001.”
Meanwhile, private sector wage growth over the quarter (5.9 per cent) is outperforming that in the public sector (1.8 per cent growth), the largest gap seen between the two in 20 years.
The government has announced that public sector workers will receive a pay rise amid a multitude of strikes, but with many of these hikes still below the current rate of inflation, ministers are facing calls to do more.
Work & Pensions minister Julie Marson said that the government was aware that people were “struggling with rising prices”, pointing out the package of support that the government had announced back in May to help households.
Marson said: “Being in stable employment is one of the best ways for people to get on, but we're also providing £1,200 direct payments for millions of low-income households as part of our £37 billion package of support to help with the cost of living.”
In terms of employment statistics, the ONS said that job vacancies over Q2 decreased for the first time since 2020, falling by 19,800 between May and July to stand at 1.274 million.
Yet, vacancies are still 945,000 up on the all-time low recorded during the early weeks of the Covid-19 pandemic between April and June of two years ago, and continued staff shortages for some firms have been singled out as an inflationary factor.
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