The article examines how wage settlements in Britain changed from 1979 to 1994, focusing on the impact of inflation. The study shows that both employees and employers were reluctant to accept nominal wage cuts. Surprisingly, high inflation, not labor market reforms, led to more real wage adjustments. When inflation was high, more groups experienced real wage cuts in manufacturing. High inflation was linked to lower real wage increases after a shock. The connection between real wages and employment changes was weak.