Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

UK wage growth rises at fastest pace in two years

by June 13, 2023
June 13, 2023
UK wage growth rises at fastest pace in two years

Wages grew at their fastest pace in nearly two years as workers benefited from new pay deals and a rise in the national minimum wage.

Official figures from the Office for National Statistics showed average weekly earnings, excluding bonuses, rose from 6.7 per cent to 7.2 per cent in the three months to April, ahead of economist forecasts of a jump to 6.9 per cent.

It was the fastest acceleration in regular pay since June 2021 and the highest on record outside the pandemic, said the ONS.

Stronger wage growth was widely anticipated on the back of the introduction of a higher national minimum wage and living wage in April. Many private sector employees also set new annual pay awards which began during the three-month period which coincides with the start of the tax year.

The ONS said weekly pay including bonuses climbed from 5.8 per cent to 6.5 per cent, also above economist forecasts.

The figures will pile the pressure on rate-setters at the Bank of England who are looking for signs of inflationary pressures strengthening across the economy. Strong wage growth often translates to rising inflation as employees are partially compensated for higher prices and can maintain their spending habits.

Real wage growth, which strips out inflation, remained negative due to the double-digit inflation reported in February and March.

The labour market showed some signs of cooling as the unemployment rate edged up by 0.1 percentage points to 3.8 per cent in the three months to April, below the 4 per cent forecast by economists. The ONS said the rise in the jobless rate was driven by people who had been out of work for over a year.

The UK labour market has been running hot for the last year, defying the pressure from rapidly rising interest rates as companies have continued to hire and retain workers.

The number of vacancies in the economy, which has been steadily declining after hitting a record last summer, fell by 79,000 to 1.05 million. Total payrolled employees were up in May, rising by 23,000, after an unexpected drop of 135,000 in April to take the total to a record of 30 million people in jobs.

April’s labour market report comes ahead of the Bank’s next interest rate decision on June 22, where the MPC is expected to increase borrowing costs by another quarter of a percentage point to 4.75 per cent. Inflation has failed to come down in line with the MPC’s projections and was at 8.7 per cent in April.

Yael Selfin, chief economist at KPMG, said: “Continued strength in pay growth will warrant higher interest rates. The pickup in regular pay growth is the latest sign that inflation is driving up pay demands, which in turn is making inflation stickier.”

A closely-watched measure of labour force inactivity, which calculates the proportion of the population not looking for work, dropped by 0.4 percentage points to 21 per cent. The ONS said that the number of people who reported long-term sickness as their reason for not working hit a record between February and April.

The UK has suffered from one of the worst declines in labour force participation after the pandemic, a factor which has drastically reduced the supply of workers and helped existing employees negotiate better pay deals.

Catherine Mann, an external member of the Bank’s Monetary Policy Committee, this week warned that early retirees risked stoking intergenerational tensions as younger workers would be forced to shoulder the burden of their retirement through higher taxes to fund public services.

Read more:
UK wage growth rises at fastest pace in two years

0
FacebookTwitterGoogle +Pinterest
previous post
UK exports in last decade worse than any G7 country except Japan
next post
Jeremy Hunt announces plans to slash taxes

You may also like

Unspent Big Tech Training Funds to Be Used...

March 18, 2024

Rainfall washes out retail sales in March

April 21, 2023

DRIVE 321 celebrates five years in business

December 15, 2023

RugbyPass scores major double win at the 2024...

September 27, 2024

Providing credibility to your numbers

March 18, 2024

Streamkap Raises $3.3M to Bring Real-Time Data at...

July 31, 2024

ChatGPT owner OpenAI to open first foreign office...

June 29, 2023

WhatsApp Faces Backlash Over Decision to Lower Minimum...

April 12, 2024

Getting to Know You: Ola Oyetayo, Co-Founder of...

August 8, 2024

Germany tips into recession with analysts warning economy...

May 25, 2023

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Musk jokes about reconsidering stance on Big Beautiful Bill after Schiff’s praise

      June 7, 2025
    • Musk deletes explosive posts about Trump and Epstein files

      June 7, 2025
    • House witness flips script on Dem who ambushed him during hearing with unearthed tweet: ‘Iceberg is ahead’

      June 7, 2025
    • Call with China’s Xi, and Trump-Musk exchange fueled barbs during 20th week in office

      June 7, 2025
    • Trump’s conservative allies warn Congress faces critical ‘test’ with $9.4B spending cut proposal

      June 7, 2025
    • Tech ETFs are Leading Since April, but Another Group is Leading YTD

      June 7, 2025

    Categories

    • Business (8,152)
    • Investing (2,019)
    • Politics (15,567)
    • Stocks (3,136)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved