British workers saw their wages in the three months to end-July rise at a faster pace than inflation for the first time in 21 months, according to estimates out Tuesday from the Office for National Statistics. File Photo by Andy Rain/EPA-EFE
Sept. 12 (UPI) -- Annual wage growth of British workers remained unchanged at 7.8% in the three months to the end of July compared with the previous quarter, its highest level since records began 22 years ago, the country's main statistical agency said Tuesday.
Pay in real terms -- when adjusted for inflation -- actually rose just 0.6% but it means regular wages are rising at a faster pace than the Consumer Prices Index for the first time in 21 months, according to an estimates bulletin from the Office for National Statistics.
Total average pay -- which includes bonuses -- jumped by 8.5% to $43,088 a year due in part to one-off payments to public sector workers as part of a delayed 2022-2022 fiscal year pay settlement, but even here real wages only grew 1.2%.
Regular pay growth for the public sector was 6.6% -- the highest since comparable records began in 2001 -- compared with 8.1% in the private sector, one of the fastest growth rates seen since COVID-19.
The fastest increase was in the finance and business services sector where the annual regular growth rate surged 9.5%, followed by the manufacturing sector where pay grew by a record 8.1%.
"Earnings in cash terms continue to increase at a record rate outside of the pandemic-affected period. Coupled with lower inflation, this means people's real pay is no longer falling," said ONS Economic Statistics Director Darren Morgan.
However, the labor market was becoming tighter with unemployment continuing its upward trajectory over the May to July period to hit 4.3% with a corresponding drop in employment, led by fewer men and self-employed in work, and job vacancies falling below one million for the first time since the economy re-opened after COVID-19.
The economically inactive numbers were also up along with the number of people off work due to long-term sickness which hit a record 491,000, Morgan said.
Industrial action by teachers, doctors and railway workers saw the number of working days lost surge in July although the overall figure for the period was below that seen earlier in the year.
Chancellor Jeremy Hunt welcomed the figures saying it was "good news" that wages were growing faster than inflation but warned that the only way to keep real pay rising sustainably was by sticking to his plan to halve inflation.
He called the strong payroll numbers "heartening" but said economic growth required a larger workforce and that he would be introducing new measures to remove barriers to people participating in the labor market.
Headline annual Consumer Price Inflation, the pace at which prices are rising, slowed by 1.1% to 6.8% in July with an almost one-fourth drop in energy inflation providing the largest contribution.
However, critical underlying inflation, which strips out volatile items like food and energy, remained at a high 6.9%.