Average basic pay for UK workers jumped at it fastest rate in almost ten years in August, according to the latest official data.
The Office for National Statistics reported on Tuesday that regular pay, which excludes volatile bonuses, was up 3.1 per cent on a year earlier in the three months to August.
This was the fastest rate of growth on this measure since January 2009.
Pay including bonuses was up by 2.7 per cent, higher than the 2.6 per cent City of London analysts had pencilled in.
The Bank of England’s chief economist, Andy Haldane, said in a speech last week that he saw signs of a “new dawn” for British wage growth, due to the exhaustion of slack in the economy.
The Bank raised interest rates to 0.75 per cent in August, taking the cost of borrowing above 0.5 per cent for the first time in a decade, citing building inflationary pressures.
It currently projects average weekly earnings growth to rise to 3.25 per cent next year and 3.5 per cent in 2020.
Fastest in 10 years
“We expect real wage growth to increase over the next year which should lift consumer spending and feed throu
gh into an acceleration in GDP growth in 2019,” said Thomas Pugh of Capital Economics
Despite the pick up in nominal regular pay growth, inflation limited the real terms increase to 0.7 per cent growth in August.
And adjusting for inflation since the financial crisis, average total pay remains around 3 per cent below its level in late 2007, or around £14 a week down.
The ONS reported that overall employment grew by a relatively modest 22,000 in the three months to August.
The employment rate was 75.5 per cent and the jobless rate was unchanged at 4 per cent.
