Weekly earnings beat inflation for fourth month in a row
This was the biggest rise since November 2008. The UK’s average salary is now £25,740 and the number of people in work hit 32.48m, a record high.
The latest inflation figures show the Consumer Prices index up 2.4% on a year ago.
However, unemployment increased slightly – by 20,000 to 1.38 million as the UK population continued to rise. This was driven by a rise in the number of unemployed men, which rose 27,000, while the number of unemployed women fell by 8,000.
Tom Stevenson, investment director for Personal Investing at Fidelity International, said: “Finally British workers’ pay is starting to claw back some of the ground it’s given up during the ‘lost decade’ since the financial crisis. After yesterday’s weaker than expected GDP figures and more Brexit uncertainty after Theresa May’s last-minute decision to abort today’s Brexit vote, today’s wage growth figures provide UK workers with a little bit of pre-Christmas cheer. The latest data show wage growth ratcheting up to 3.3% both including and excluding bonuses. This means our pay packets continue to comfortably outstrip inflation.
However, he added that UK workers are not yet out of the woods and the recent steps forward could be reversed by the ongoing political and economic uncertainty: “Britain’s pay growth continues to lag our main competitors since the financial crisis.” Nevertheless, this ‘cocktail of concerns’ should ensure that the Bank of England has little incentive to hike interest rates any time soon, which is good news for borrowers if not for savers.