Britain’s future is looking brighter and brighter in the wake of figures released by the Office of National Statistics which reveal that wages paid to British workers grew at the joint-fastest rate since the summer of 2015 in the three months to July.
Additionally, the figures showed that average regular pay, which excludes bonuses, rose by 2.9 per cent in the three months to July compared to a year ago, the Office for National Statistics said. The reading came in higher than economists’ average expectations, and higher than last month’s 2.7 per cent reading.
Total pay growth also accelerated from 2.4 per cent to 2.6 per cent, although only to match the level hit in May.
The increases in pay have accelerated over the past 18 months, as unemployment has fallen steadily. The latest unemployment figures, also published today, showed the proportion of the labour force out of work remained at four per cent in July, the joint-lowest level since the mid-1970s.
Rising wages were a key reason behind the unanimous decision by the Bank of England’s monetary policy committee to hike its key interest rate at the start of August, in the anticipation of rising inflationary pressure when demand for goods and services outstrips supply.
Many economists believe that the so-called slack remaining in the economy has now all but disappeared, with the employment rate – the proportion of all working-age adults in paid work – remaining near record highs. The number of job vacancies also rose to the highest since comparable records began in 2001, indicating that firms are struggling to hire workers.
“The labour market figures suggest that competition for workers is finally starting to provide greater support to wages,” said Andrew Wishart, UK economist at Capital Economics.
The release of the new figures represent strong signals that the British economy will thrive well into the future, despite grumblings over Brexit.