Average wage growth
The official figures from the Office for National Statistics (ONS) show that the UK’s total average pay rose by more than had been expected between May and July 2017 and the same three-month period up to July 2018.
Analysts in the City of London had predicted a lesser rise of 2.4%, which is the same percentage that pay had increased the year before, between July 2016 and July 2017. Pay (with volatile bonuses excluded from the figures) was up 2.9%.
In fact, in the month of July alone this year, UK regular pay had increased by 3.1% – this is the fastest increase seen since three years before. A record increase in both speed and numbers.
The Bank of England had predicted that inflationary pressure will follow a further decrease in slack in the UK economy, meaning that this recent study will reassure them that their judgement was correct. In August this year, the Bank of England increased their interest rates to 0.75% on the assumption that wages would increase this year by 2.5%, eventually growing to 3.25% in 2019.
Andrew Wishart, of Capital Economics, has stated that the latest labour market statistics are beginning to show that competition for workers has been seen to increase their wages at last. Mr Wishart commented that this increase in the UK average wage will continue to grow at a rate of around 3% for the rest of this year.
The Office for National Statistics have also provided recent findings to prove that the UK’s employment growth is starting to level off – with numbers rising by only 3000 this quarter.
And yet the UK employment rate is still at 75.5%, almost the highest number on record, while the percentage of unemployed remained at 4.1%.
David Freeman of the Office for National Statistics has said that the number of Brits who are currently in work has barely changed, so the growth of the employment rate is less impressive.
Yet the UK is experiencing a strong labour market at the moment, with this historically high employment rate, in addition to the reduced unemployment between this year and last, plus an incredibly high number of job vacancies. The UK employment market is in a decent state.