Wages on the up
But inflation takes big bite out of fastest rise for decade
WAGES have risen at the fastest pace since the financial crisis erupted a decade ago.
Firms are finally coughing up more because unemployment is at a 43-year low and job vacancies are rising.
According to the Office for National Statistics, the average worker earned £492 a week before any deductions in the three months to August, up 3.1% on a year ago.
But the pay hike has been dented by inflation which slashed the average “real” wage rise to just 0.7%, compared to more than 2% before the banking meltdown in 2008.
The squeeze is even worse for public sector staff.
Pawel Adrjan, economist at jobs site Indeed, said:
“Oil tankers look speedy by comparison, but Britain’s labour market is slowly pivoting from job growth to pay growth.”
Stephen Clarke, analyst at the Resolution Foundation, added: “This comes off the back of a truly awful decade for wages which means they remain £12 a week lower than a decade ago.”
Unemployment dropped 47,000 to 1.36 million between June and August, leaving the jobless rate at 4%, the lowest since early 1975.
There were 832,000 job vacancies between this July and September, with little change on the previous three months but 35,000 more than a year ago. TUC General Secretary Frances O’Grady called on the Government to use the Budget to raise the minimum wage to £10 an hour, crack down on insecure work, end unfair pay for agency workers and ban zero-hours contracts.
She said: “The jobs market is tightening, but this is not leading to decent pay increases.”
Economists reckon the pick-up in pay and inflation could trigger another Bank of England rate rise, which is good news for savers but bad for borrowers.