Wages rise at fastest rate for 2 years

WORKERS received some pre-Christmas cheer yesterday after it emerged that wages were rising at their highest rate for two years.

Average pay is increasing comfortably faster than the price of goods, easing pressure on family finances in the run-up to Christmas.

Wages are 1.6 per cent higher than the same time last year, comfortably outstripping inflation at 1 per cent, according to the Office for National Statistics. The rise works out at an average of around £400 more a year.

The news is a welcome pre-election boost for David Cameron, who said it showed the Government’s ‘long-term economic plan is working’. The ONS also reported that employment had hit another record high and was now at 30.8million, 588,000 more than at the same time last year.

And the number of people claiming jobseeker’s allowance fell by 27,000 in November, the 25th consecutive monthly fall.

Danny Alexander, Chief Secretary to the Treasury, said: ‘We now have a triple boost of positive news in the run up to Christmas.

‘Yesterday, inflation came in at just 1 per cent. Today, we have confirmation that the economy is continuing to create jobs at a healthy rate, setting a new record “in work” total. And the news that wages are rising faster than inflation will help working families across the country.’

Yesterday, the Bank of England revealed that households should benefit from lower than expected i nflation i n the coming months, adding it believes inflation will fall even lower than its current 1 per cent.

Analysts said the slump in the oil price and the prospect of an extended period of belowtarget inflation will give the Bank room to leave interest rates at 0.5 per cent until well after the general election in May.

And Bernard Brown, of accounts KPMG, said 2014 would ‘go down in history as a year of recovery’, adding ‘the increase in disposable income can only be a good thing.’