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UK wages rise by highest percentage in nearly a decade

A low rate of unemployment in the UK is helping to push wages up at the fastest rate for close to 10 years.

The latest data from the Office of National Statistics shows that the rate of regular pay rises has increased significantly for the quarter ending in August 2018. Compared to the same period last year, increases are 3.1% higher.

This means that regular pay is growing at the fastest rate since 2008, when the financial crisis was triggered by the collapse of Lehman Brothers. However, when real pay is adjusted to take into account price rises, weekly wages are an average of £11 lower than in 2008.

When bonuses are included in the calculation, the rate of growth is just 2.7%. That is only 0.1% higher than last quarter.

The main reason the rate of pay rises is increasing is that the labour market is tightening. Once again, unemployment is down. It fell by 47,000 to just 1.36 million. As a result, firms are finding the filling of vacancies more challenging.

The senior economic analyst at the Resolution Foundation, Stephen Clarke, said:

“Further pay gains may come from falling inflation in the months to come, but sustaining them will require faster productivity growth in the months and years ahead.”

Understandably, many local businesses are already sitting down with their Bromborough accountant teams in an effort to find ways to put together more attractive remuneration packages. Firms need to be able to reduce overheads to free up funds to pay their staff more. In the current climate, being able to recruit and retain staff is vitally important.

Posted by Peter
November 6, 2018
Research & Statistics

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