AVERAGE wages in Fife have risen by less than 7 per cent as the cost of living crisis begins to bite and real wages continue to fall across the UK, new figures show.

The Trade Union Congress said the new Prime Minister Liz Truss "must get pay rising" ahead of a difficult winter with many households worried how they will make ends meet.

The latest ONS figures show median pay in the area covering Fife and Clackmannanshire was £2,085 per month in August – up from £1,961 a year before.

It means wages have risen by 6.3 per cent in the last 12 months, just as the cost-of-living crisis has begun.

Nationally, the median monthly wages have risen by 6.5 per cent in the last year to £2,111 in August, but this still represents a real-terms pay cut thanks to soaring inflation.

Further ONS figures show real-terms pay excluding bonuses – taking inflation into account – fell by 2.8 per cent year on year between May and July across the country, among the largest drop seen since records began in 2011.

TUC General Secretary Frances O'Grady said: "Every worker deserves a decent standard of living, and as the cost-of-living crisis intensifies, millions of families don’t know how they will make ends meet this winter."

Ms O'Grady urged Mrs Truss to increase pay packets, including boosting the minimum wage, giving public sector workers a decent pay rise, and allowing unions to negotiate better compensation for working people.

Greg Thwaites, research director of think tank Resolution Foundation, said the only "chink of light" is the slight fall in inflation – which is still close to a 40-year high but eased slightly to 9.9 per cent in August from 10.1 per cent the month before.

It means pay packets might not shrink any faster, though they will not grow in the next year, he said.

Unemployment among 16 to 64-year-olds also continued to fall nationally year on year, reaching its lowest point since 1974 at 3.7 per cent in the three months to July, separate ONS statistics outline.

In Scotland, it stood at 3.1 per cent – down from 4.4 per cent the year before.

Despite the fall in unemployment, economic inactivity rose to 21.7 per cent across the UK – it was at 22.4 per cent in Scotland.

Mr Thwaites said: "Instead of the cost-of-living crisis tempting people back into work, more people are exiting the jobs market altogether, primarily due to poor health reasons".

The Treasury declined to comment due to the period of national mourning.