The UK's highest earners have seen their annual pay jump 10% in recent months - in stark contrast to a miserly 1% increase for the worst paid workers.
Bankers, lawyers, accountants, professional services staff and insurance workers, particularly those in the City of London, have benefitted from the tight labour market to negotiate record pay rises and generous bonuses.
But the lowest-paid workers have seen a decline in real wages and may be struggling to make ends meet as the cost of living soars on the back of soaring inflation and energy prices.
A report by the Centre for Economics and Business Research (CEBR) revealed this "tale of two labour markets."
Nina Skero, CEBR’s chief executive, said the lowest-paid 10% of workers were falling well behind the general inflation rate of 9.4% and would suffer more than other groups if inflation increases to 13%, as the Bank of England forecast.
CEBR said additional support targeted at the poorest households, including those in work, “will be necessary if they are to avoid worsening hardship”.
It said the stagnation in pay among the poorest workers “is coming at a time of extraordinary price rises and their ability to dip into savings is usually limited”.
“Hence, measures such as uprating benefits in line with current rather than earlier inflation readings should again be considered as for many, it really is the worst of times,” the consultancy said.