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Pay growth across the UK has picked up, ending the recent slowdown in earnings, even though fewer vacancies are available for workers across the economy.
New data from the Office for National Statistics this morning show that average pay, both including and excluding bonuses, rose by 5.2% per year in the three months to October.
That’s up from 4.8% for regular earnings in July-September, and 4.3% for total earnings, suggesting an acceleration in pay growth this autumn.
Manufacturing workers saw the largest pay rises, again, with average pay up by 6.0%.
Regular earnings (ex-bonuses) swelled by 5.4% in the private sector, and by 4.3% in the public sector, the ONS reports.
While rising pay will cheer workers, especially as Christmas bills pile up, it will cause some jitters at the Bank of England – where policymakers fret about inflationary pressures building.
ONS director of economic statistics Liz McKeown said: “After slowing steadily for over a year, growth in pay excluding bonuses increased slightly in the latest period, driven by stronger growth in private sector pay. Pay growth including bonuses increased by more, but this reflects previous figures being affected by the one-off payments made to some public sector employees in 2023.
“The number of people on payrolls grew slightly in October, but we have seen annual growth rates continue to slow, showing a consistent trend with our latest jobs data from employers. The number of job vacancies has also fallen again, though the total remains a little above where it was before the pandemic."
More broadly, the latest labour force statistics also show another decrease in vacancies; they fell by 31,000 in the September-November quarter to 818,000 – still above their levels before the Covid-19 pandemic.
The ONS has reweighted the Labour Force Survey with updated population data, in an attempt to make its statistics more reliable.Today’s report shows that the unemployment rates was 4.3% in the three months to October, the same as a month ago.
Joe Nellis, the economic adviser to the accountancy and advisory firm MHA, says: "The unemployment rate holding steady at a relatively low 4.3% is not a significant cause for celebration, as the long-standing problems in the UK’s labour market continue to undermine attempts to reignite a flatlining and underperforming economy."
The economic inactivity rate, which measures how many people are neither in work nor looking for a job, was estimated at 21.7% in August to October 2024, slightly lower than the 21.8% in July-September.
UK pay growth has also jumped once you adjust for inflation.
Using CPI real earnings, real regular and total pay rose by 3.0% on the year in August to October, the Office for National Statistics reports.
That’s the fastest growth in real pay since this spring, the ONS explains: "Regular real annual growth was last higher than 3.0% in April to June 2024 (3.2%) and for total real pay was equal to 3.0% in March to May 2024. Total annual growth is no longer affected by the civil service one-off payments made last year."
The agenda
• 9am GMT: IFO survey of German investor confidence
• 10am GMT: EU trade balance for October
• 1.30pm GMT: US retail sales report for November
We'll be tracking all the main events throughout the day … |
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