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British wages continued to grow at the fastest pace on record in the three months to July, official data showed on Tuesday, despite a weak job market with rising unemployment and slowing hiring.
The Office for National Statistics said annual growth in average pay (excluding bonuses) remained at 7.8%, the highest rate since comparable records began in 2001. Total wages rose by 8.5%, helped by a one-off payment to NHS staff and servants following a pay deal to end strike action.
This means average wages are now rising faster than inflation – a development that will bring welcome relief to households but is likely to exacerbate the Bank of England’s concerns about inflation.
The British pound edged up 0.06% to $1.2515 in early trading. The swap market predicts that the probability that the Bank of England will raise interest rates by 0.25 percentage points to 5.5% on September 21 is close to 80%.
Chancellor Jeremy Hunt said: “It is heartening that our employment numbers remain close to record highs and our unemployment rate remains lower than many of our international peers. “Wage growth remains high, in part because of A one-off payment to public sector workers but for real wages to grow sustainably we must stick to our plan to halve inflation.”
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