Pay rises higher than inflation

LIVING standards in Britain are rising as wage growth outstrips price rises – sparking hopes that a decade of stagnation since the financial crisis has ended.

Average pay excluding bonuses climbed 2.9 per cent in the year to July, rising £14 to £489 a week or £25,428 a year.

Inflation is running at 2.5 per cent as measured by the consumer price index, so pay cheques are stretching further.

The pay rise, which beat City expectations, was driven by growing competition between employers for candidates.

There were 833,000 job vacancies between June and August, up 44,000 on a year earlier and the highest since records started in 2001. With so many roles available and unemployment close to alltime lows, firms are having to fight to attract staff with the promise of better wages.

Andrew Wishart, of Capital Economics, said: ‘Competition for workers is finally starting to provide greater support to wages.’

Bank of England chiefs meet tomorrow to discuss interest rates, but economists do not expect another rise until November at the earliest.