The latest monthly pay report was released by the Office for National Statistics today.
It shows that average total pay (including bonuses) for the people surveyed was £491 a week in February.
That’s pretty disappointing.
Taking a three month average of this pay metric (so covering the December to February period) and comparing it to the same three month period a year earlier the rise in average pay is only 1.8 per cent. That's the weakest rate of expansion seen since February 2015.
The Bank of England had expected the annual rate of average pay growth to strengthen to around 3 per cent this year. That is now looking optimistic. It’s true that British workers are getting real terms pay rises, not least because consumer price inflation is currently just 0.5 per cent. But they are nothing to write home about. And pay growth is still much weaker than many economists, trade unionists and workers expected relatively recently.
The big picture on pay also remains shocking.
If we use the three month average pay metric to look back over the past decade and adjust for consumer price inflation over that same period we see average weekly wages are still 7 per cent lower than they were way back in March 2008. That’s equivalent to £40 a week for the average worker:
As the chart shows, since 2014 average wages have begun climbing back up to the pre-crisis peak. But at this underwhelming rate of growth it will still be several years before we get back to where we were on the eve of the 2008-09 Great Recession. This is almost certainly going to be a "lost decade" for average pay in the UK.
