UK wages grow at a faster pace than expected

Wage growth beat market and economist expectations in the three months from February to April

Official figures released by the Office for National Statistics have shown that after taking inflation into account, UK wage growth was at 1.4%.

The unemployment rate remained at 3.8% and has not been lower since the October to December 1974 period.

The employment rate for women was 72%, the highest on record. This is partly due to changes to the state pension age leading to fewer women retiring between the ages of 60 and 65.

Matt Hughes, deputy head of labour market statistics at the ONS, said: “With employment growth among women coming from full-timers, the overall gap between men and women in hours worked is now the lowest ever – women now average about three-quarters of men’s weekly hours, compared with around two-thirds 25 years ago.”

While employment growth slowed, the jobless rate held at 3.8

PwC chief economist, John Hawksworth, said it was “interesting” that female employment rose by 60,000 compared with the previous quarter, while male employment fell by 27,000.

“This is consistent with a longer-term trend towards a narrowing gender employment gap.

“Male employment is still higher at around 80%, but this is well below its historical highs of over 90% back in the 1970s.”

Tej Parikh, chief economist at the Institute of Directors, said: “The buoyant labour market is still going strong for the UK economy, even as it weathers widespread political uncertainty.”

“However, the employment boom cannot last forever, and is certainly showing signs of softening.”

With 357,000 jobs having been created over the last year, overwhelmingly full-time, companies are now having to pay a higher price to attract staff.

Strip out inflation, however, and real wages remain on average a touch below pre-financial crisis levels.

But bumper pay rises could come at a cost. The Bank of England is known to be concerned that faster pay growth could equal higher inflation, which could mean it’s more inclined to raise interest rates.

Kyle Monk, head of retail insight and analytics at the British Retail Consortium, said: “It has been a turbulent year, with many well-known brands disappearing from our High Streets, as has been evidenced by the substantial loss in retail jobs this quarter.

“Political and economic uncertainty has compounded many of the challenges created by the pace of technological change.”

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