The gap between earnings for workers from different regions has widened further since the start of the pandemic, research from the Institute of Fiscal Studies (IFS) found.
Between February 2020 and May 2023, the mean earnings of workers living in London increased by 5% - when accounting for inflation – to reach £4,400 a month.
Similarly, workers in areas within commuting distance to the UK capital saw on average a 4.5% pay increase since Covid.
These figures remain far ahead of the 2.7% average increase experienced by the rest of the country.
Xiaowei Xu, a senior research economist at the IFS said: “Inequality in mean earnings across the country had been falling in the two decades leading up to the pandemic, with the poorest areas seeing the highest pay growth. Since 2020 we have seen a reversal of this trend.”
She believes areas like London saw the largest increases because the industries operating in the city had been some of the strongest areas of wage growth.
Pay for administrative and support service workers jumped by nearly 10% since the start of Covid while professional services saw wages rise by 8.6%.
In the finance industry wages rose by 7.6% despite falling from peaks in 2022 and the IT sector experienced wage growth of 5.5%.