WAGE GROWTH PICKS UP O ER SUMMER MONTHS
The latest set of employment statistics showed that the UK labour market remains in a particularly robust state and also revealed a recent pick-up in pay growth.
According to data from the Labour Force Survey the number of people unemployed stood at 1.36 million in the three months to July, 55,000 fewer than in the previous three-month period. This left the unemployment rate at 4.0%, its lowest level for over 40 years. And, while the number of people in work during the three months to July remained unchanged at 32.4 million, this still represents a historically high level.
The data also reported a faster than expected increase in pay growth with average weekly earnings excluding bonuses rising by an annual rate of 2.9% in the three months to July – a figure that has not been bettered in three years. This rate was at the top end of economists’ forecasts and compares with wage growth of 2.7% in the previous three-month period.
An industry survey has also suggested that the upward pressure on wages may have been sustained in August. XpertHR, an organisation which analyses pay settlements, said that its survey found that median pay deals offered by major UK companies in the three months to August was 2.5%, up from 2.3% in the three months to July.
Clearly, the good news for households in relation to wages was somewhat tempered by August’s inflation rise which suggests that the squeeze on real incomes may not be over. However, the data does still show that wages are currently rising more quickly than prices. And, while it will take a more significant acceleration in wage growth to close the gap in pay that has emerged over the last decade, the data is now painting a rosier picture on wage growth.
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