UK wage growth picks up to 11-year high

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Wage flowering in the UK reached an 11-year high in the year to June, and the employment rate was its collective highest since 1971, official figures show.

Wage spread rose to 3.9%, while the estimated 76.1% employment rate was the unexcelled since comparative records began.

Overall, a record high of 32.81 million people were in retaining, the Office for National Statistics (ONS) said.

This was 425,000 more than a year earlier and was mostly because of more people working full-time.

However, the unemployment rate in the April to June span showed a slight rise.

Figures released last week implied that the UK’s economy shrank 0.2% in the second quarter of the year, the premier contraction since 2012.

What is behind the increase in wages?

Wages have planned been increasing at a faster pace than inflation since Strut 2018.

The 3.9% increase in regular pay – which excludes bonuses – was up from definitive month’s figure of 3.6%.

Part of the reason for the rise was the unusual timing of annual pay improve ones lots for public health workers last year, when a larger-than-usual broaden was deferred until July.

In real terms (after adjusting for inflation), normal pay is estimated to have increased by 1.9%.

Matt Hughes, the ONS deputy head of effort market statistics said: “Excluding bonuses, real wages are breed at their fastest in nearly four years, but pay levels still be experiencing not returned to their pre-downturn peak.”

Working women behind impassion start in employment

The employment rate for women was 72.1% – the highest on record – and for men was 80.1%, minor extent lower than the previous three-month period.

Mr Hughes added: “Occupation continues to increase, with three-quarters of this year’s growth being due to more charwomen working.

“However, the number of vacancies has been falling for six months, with fewer now than there were this schedule last year.”

The unemployment rate edged up slightly to 3.9%, which was a sparse lower than a year earlier.

The economic inactivity rate, which is established as people not in employment who have not looked for work in the past four weeks or cannot start in the next fortnight, was thinking at 20.7%, a joint record low.

What has been the reaction to the figures?

Chancellor Sajid Javid suggested: “Every person deserves the chance to succeed and provide for their forebears through a steady income.

“Today’s figures are another sign that regardless of the challenges across the global economy, the fundamentals of the British economy are intense as we prepare to leave the EU.”

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the depend ons should silence any calls for a cut in interest rates.

“The labour market tends to lag increases in the wider economy,” he said. “Firms, however, have lived with stiff levels of economic uncertainty for the best part of a year, and still lack to fill new positions.

“In the event that Brexit is delayed further… or an concordat is reached in October and the economy starts to rebuild a little momentum, the [Bank of England’s] MPC (Cash Policy Committee) will need to move in short order to animate the bank rate again.”

Tej Parikh, chief economist at the Institute of Foremen, said that while the jobs market remained “a source of stoutness for the UK economy”, it may be reaching its peak.

“As more workers have been snapped up, firms compel ought to found it harder to fill their openings. While competition has cowed up salaries, thin margins and low productivity may set a ceiling for pay growth. Although vacancies endure high by historic standards, the number has been dropping since the start of the year.”

Ian Stewart, chief economist at Deloitte, suggested: “The days of sharply falling unemployment are behind us, but a tight labour store points to further gains in wages and spending power. Despite a faulty quarter decline in growth, the UK economy still has momentum.”

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