Wages rise at fastest rate in decade

WAGES are rising at their fastest rate in a decade as Britain’s jobs boom continues.

Pay packets grew by 3.1 per cent in the year to August to an average £492 a week or £25,584 a year. It is the biggest increase since 2008 and suggests that growth is finally picking up after years of near-stagnation.

Wages are also climbing faster than inflation, meaning families are able to buy more with the money they earn, according to the Office for National Statistics.

In real terms, once inflation has been stripped out, regular pay excluding bonuses was 0.7 per cent higher than a year earlier.

The figures suggest that the economy remains healthy and that consumer spending is likely to pick up. Andy Haldane, chief economist at the Bank of England, hailed a ‘new dawn’ for wage growth in a speech last week.

There were 32.4million people in the work in the three months to August, the ONS said – 289,000 more than a year earlier. It means that 75.5 per cent of 16 to 64-year-olds are working, close to record highs.

The unemployment rate stands at 4 per cent, its joint-lowest since 1975. Fewer than 1.4million 16 to 64-year-olds are out of work and looking for a job, down 79,000 in the previous 12 months.

The youth unemployment rate is at 10.8 per cent, a record low and half what it was when the Tories came to power in 2010.