Wage growth hits 11-year high, but pay is still below pre-recession peak
UK wage growth reached its highest level since 2008 in the year to June, according to figures from the Office for National Statistics (ONS).
Regular pay excluding bonuses grew by 3.9 per cent, while total pay, which takes bonuses into account, increased by 3.7 per cent.
After adjusting for inflation, regular pay was up by 1.9 per cent compared with a year earlier, and total pay rose by 1.8 per cent.
Matt Hughes, deputy head of labour market statistics at the ONS said: “Excluding bonuses, real wages are growing at their fastest in nearly four years, but pay levels still have not returned to their pre-downturn peak.”
In real terms, the average worker took home £469 per week in June, higher than £460 a year earlier, but £4 lower than the pre-recession peak of £473 in April 2008.
Employment figures, also released today, show 76.1 per cent of 16-64 year olds were working in the three months to June – a joint record high.
Some 72.1 per cent of women were in paid work, the highest female employment rate on record.
Hughes said: “Employment continues to increase, with three-quarters of this year’s growth being due to more women working.
“However, the number of vacancies has been falling for six months, with fewer now than there were this time last year.”
The ONS said the increase in the employment rate for women in recent years is partly because of changes to the State Pension age for women, resulting in fewer women retiring between the ages of 60 and 65.
According to the data, the unemployment rate was 3.9 per cent 0.1 percentage points higher than the previous quarter.
Around 1.33 million people were unemployed, 33,000 fewer than a year earlier and 732,000 fewer than five years earlier.
Tom Stevenson, investment director for Personal Investing at Fidelity International, said: “With earnings growth of 3.9 per cent excluding bonuses remaining well above the rate of inflation, many households will feel they are enjoying a more comfortable standard of living at the moment. More people are in work than at any time since 1971.
“However, there is strong evidence to suggest a more balanced outlook than these numbers imply. Last week’s news that the UK economy contracted during the second quarter of the year has prompted fears of a recession.”