Wage growth at strongest level for nearly a decade

According to official figures, pay packets rose by an average of 3.1 per cent in the three months to August, the fastest pace for nearly a decade.
The figure excluding bonuses was up from 2.9 per cent in the previous period.
The level of wage growth has not been as strong as 3.1 per cent since the three months to January 2009 and has not been higher than that figure since 2008.
The Office for National Statistics (ONS) also said employment fell by 47,000 to 1.36 million whilst the unemployment rate remained at a 43 year low of 4 per cent.
However, the figures look less impressive when taking account of the effect of inflation – in real terms pay rose by just 0.7% over the period, though this was still the best since the end of 2016.
ONS head of labour market David Freeman said: “People’s regular monthly wage packets grew at their strongest rate in almost a decade but, allowing for inflation, the growth was much more subdued.
“The number of people in work remained at a near record high, while the unemployment rate was at its lowest since the mid-1970s.”
The greater than expected pay figures come after Bank of England chief economist Andy Haldane last week said he saw signs of a “new dawn” for wage growth.
Experts have been puzzled about why earnings increases have been sluggish even though unemployment has been falling sharply.
Pay growth of around 4% was the norm before the financial crisis, and many British households have seen their finances squeezed as wage growth trailed behind price increases.
Stephen Clarke, senior economic analyst at the Resolution Foundation, said: “Britain’s jobs surge is at last feeding through to higher wages, with pay packets growing at their fastest rate since the financial crisis almost a decade ago.

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