Biggest rise in wages since records began
Official figures show that wages have risen at a record annual pace over the past three months, while unemployment has edged up slightly.
The Office for National Statistics said regular salaries rose 7.8 percent between April and June.
Meanwhile, unemployment rose to 4.2 percent in the three months to June, compared with 3.9 percent in the previous three-month period.
The unemployment rate is the highest since the three months to October 2021, according to the ONS, and is above pre-pandemic levels.
In real terms, regular wages rose 0.1 percent for the year, adjusted for the consumer price index including home ownership inflation (CPIH).
It is the first time real wages have risen since October 2021, the ONS added.
Wage growth comes against a backdrop of high inflation, or rising prices, which are beginning to ease but are still at 7.9% – well above the Bank of England’s 2% target.
Inflation figures for July are due later this week and analysts expect the rate to fall by as much as a full percentage point.
Data is expected to show consumer price index (CPI) inflation falling to around 7 percent from 7.9 percent.
However, The Independent expects analysis by tax officials to show inflation will pick up again in August – with the unwelcome turnaround reflected in figures released next month.
ONS data released on Tuesday also showed that inactivity in the labor market due to long-term illnesses hit a new record.
Vacancies also fell by 66,000, but are still just over the million mark (1.02 million).
Jack Kennedy, chief economist at global hiring and placement platform Indeed, said: “There are signs the cost of living may finally be coming down after record-breaking annual wage growth pushed wages above inflation for the first time in over a year and a half.” -Half a year.
“Regular wage growth jumped to a record 7.8 percent year-on-year in the second quarter of 2023, the highest since comparable data began in 2001.
“Including bonuses, the figure was 8.2 per cent year-on-year, reflecting one-off NHS bonuses in June.”
He added: “While wage growth figures will attract attention, ONS data also showed that the labor market continues to rebalance.
“The unemployment rate rose more than expected, by 0.3 percentage points to 4.2 percent, driven by a rise in long-term unemployment and more people exiting inactivity. However, inactivity due to long-term illnesses hit a new record.”
The data also shows that the number of wage earners rose by 97,000 to 30.2 million in July, although the ONS said that’s a “preliminary estimate likely to be revised when more data comes in next month.” “.
Commenting on the numbers, Chancellor Jeremy Hunt said: “It’s great to see a record number of employees, thanks to the actions we’ve taken on the labor market.”
“Our ambitious reforms will make work pay and help even more people find work – including by expanding free childcare next year – helping to meet our priority of economic growth.”
Darren Morgan, director of economic statistics at the ONS, said: “The number of unemployed has risen again while the number of people in work has fallen somewhat.”
“That’s largely because people are taking a little longer to find a job than those who have started job hunting in recent months.”
“The decline in those who are neither working nor looking for work mainly affects those who are caring for their families or their homes.
“Meanwhile, the number of people who have become unable to work due to long-term illnesses has once again risen to a new record.
“The number of vacancies has fallen by over a quarter million since this time last year. However, they are still well above the level before the Corona crisis.”
“Revenues continue to grow in cash terms, with base salaries growing at the fastest rate since current records began.”
“Coupled with lower inflation, this means that people’s real wages are recovering and are now looking a little better than they were a few months ago.”
