Cost of Living UK: Average Salaries Slip £1,800 in Past Year

The cost of living continues to hit workers as average advertised salaries slipped £1,800 in the past year as the UK labour market re-sets itself in the wake of public sector cuts and private sector growth.

According to research from jobs site Adzuna.co.uk, the average advertised salary was £31,818 ($53,597, €38,645) in March 2014 – 0.6% lower than in February, and 5.3% lower than March 2013.

Factor in inflation, and average salaries have fallen by £2,358 in real terms over the same period.

The report also revealed that salaries have stagnated most in areas like London, where widespread cuts in the public sector have been replaced by significant growth in lower paid, private sector roles.

But the salary slide is set against a background of far more positive job market statistics.

Consumer Price Index (CPI) inflation has fallen to 1.6% – the lowest in four and a half years and the third consecutive month below Mark Carney's goal of 2%.

"Official indicators for the jobs market are resoundingly positive, but hidden beneath the headline statistics is a more complicated truth," said Andrew Hunter, co-founder of Adzuna.

"UK salaries overall are still stagnating, with only a select few industries showing pay growth and the market rebalancing itself after the public/private sector shake-up,"

The study also found that there is a strong vacancy growth trend, in line with the falling unemployment rate.

There were 841,011 advertised vacancies in March – 24% higher than a year before.

And competition for jobs fell 29% compared to March 2013.

The figures come after the Office for National Statistics (ONS) recently revealed that annual wage growth hit 1.7% in the three months to February.