The average earnings by Britons have risen faster than inflation at the highest level for two years, amid a slight slowdown in the UK employment rate.
This is among the highest values since comparable records began in 2001. Regular pay rose faster than prices over the same analysed period.
The average total pay, which includes bonuses was 7.9 percent. The ONS said the value was affected by civil service one-off payments made in July and August 2023.
When adjusted for inflation rate, the total pay on the year grew by 1.4 percent and regular pay by 1.3 percent.
The latest wage figures come amid a slowing inflation rate. Since the beginning of the year, inflation has come down from 10.1 percent in January to 6.7 percent in September.
“With inflation easing in the latest quarter, real pay is now growing at its fastest rate for two years,” said Darren Morgan, ONS director of economic statistics.
Inflation of 6.7 percent is still very high, when compared to values in the past decade. Prime Minister Rishi Sunak’s government has vowed to halve it by the end of the year, which will bring it down to around 5 percent, with the aim of eventually reaching a 2 percent target.
Industries and Vacancies
The ONS reported slower wage rises in some industries. The finance and business services sector saw the largest annual regular pay growth rate at 9.4 percent, but it compares to a higher result of 9.8 percent in June to August.The manufacturing sector saw a wage growth of 7.7 percent, retail and restaurants at 6.6 percent, and construction at 5.8 percent.
UK’s unemployment rate remained unchanged at 4.2 percent, but analysis showed falling numbers of job vacancies.
The estimated number of vacancies in the UK between August and October fell by 58,000 to 957,000. The ONS noted it was the 16th consecutive period of a drop in the number of vacancies.
The findings showed that in October, the number of payrolled employees increased by 33,000 on the revised September 2023 figure, to 30.2 million.
At the same time, the UK employment rate decreased by 0.1 percent, in a slight drop to 75.7 percent. The rate of economic inactivity largely remained unchanged for the quarter at 20.9 percent.
The UK’s economy was affected by 229 days lost to strike action in the third quarter, which was up 110 on the previous quarter.
Medical professionals, including consultants and junior doctors, as well as university staff and rail and airport workers, all launched industrial action between July and September.
“Our labour market figures show a largely unchanged picture, with the proportions of people who are employed, unemployed, or who are neither working nor looking for a job all little changed on the previous quarter. The number of job vacancies fell for the 16th straight month. Nevertheless, vacancies still remain well above their pre-pandemic levels,” said Mr. Morgan.
“We don’t expect wage growth to fall to the rates of 3.0–3.5 percent that are consistent with the 2.0 percent inflation target until early in 2025,” he added.
