Biggest rise in wages since information started

Wages grew at a file annual tempo previously three months as unemployment rose barely, official figures present.

The Office for National Statistics stated common pay rose by 7.8 per cent between April and June.

Unemployment, in the meantime, rose to 4.2 per cent  within the three months to June, up from 3.9 per cent within the earlier three-month interval.

The unemployment charge is the best because the three months to October 2021, the ONS stated, and brings the measure above pre-pandemic ranges.

In actual phrases, common pay rose 0.1 per cent  for the yr when adjusting for Consumer Prices Index together with proprietor occupiers’ housing prices (CPIH) inflation.

It is the primary time since October 2021 that actual wages have elevated, the ONS added.

Growth in wages comes in opposition to a backdrop of excessive inflation, or rising costs, which have begun to ease however stay at 7.9 per cent – effectively above the Bank of England’s 2 per cent goal.

The inflation figures for July are printed later this week and analysts anticipate the speed to fall by as a lot as a full share level.

The ONS knowledge is predicted to point out shopper costs index (CPI) inflation falling from 7.9 per cent to round 7 per cent.

However, The Independent understands that evaluation by Treasury officers exhibits that inflation will rebound once more in August – with the unwelcome reversal set to point out up in figures launch subsequent month.

The ONS knowledge printed on Tuesday additionally confirmed that inactivity within the labour market because of long-term illness hit a brand new file excessive.

Job vacancies additionally fell by 66,000 although stay simply above the million mark (1.02m).

Jack Kennedy, senior economist on the international hiring and matching platform, Indeed, stated: “There are signs the cost of living could finally start to ease after record annual pay growth drove pay above inflation for the first time in over one-and-a-half years.

“Regular pay growth jumped to a record 7.8 per cent year on year in the second quarter of 2023, the highest it’s been since comparable data began in 2001.

“Including bonuses, the figure was 8.2 per cent year on year, driven by one-off NHS bonuses in June.”

“While the wage growth figures will grab attention, the ONS data also showed the labour market continuing to rebalance.

“The unemployment rate jumped by a larger than expected 0.3 percentage points to 4.2 per cent, driven by an increase in long-term unemployment and more people moving out of inactivity. However, inactivity due to long-term sickness hit a new record high.”

More to observe on this breaking information story…

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