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

Future Retirement Success

Business

Wages outstrip inflation for first time in over a year

by September 12, 2023
September 12, 2023
Wages outstrip inflation for first time in over a year

Workers’ wages outstripped the pace of inflation for the first time in over a year in July, helping ease the strain on households who have suffered from an erosion in their real pay.

Official statistics showed that average weekly earnings across the economy, when stripping out bonuses, rose by 7.8 per cent in the three months to July, in line with economists’ forecasts and matching the highest pace of wage growth recorded in 22 years.

The average earnings figure surpasses the headline rate of consumer price inflation recorded in July of 6.8 per cent and is the first time wage growth has come in higher than prices since October 2021.

When including bonuses, average earnings rose by 8.5 per cent, above forecasts of 8.2 per cent, and a figure that may be used to uprate state pensions if the government commits to its longstanding triple lock policy later this year. The Office for National Statistics said bonuses awarded to civil servants and NHS staff helped push up the figure in July.

Darren Morgan, director of statistics at the ONS, said: “Earnings in cash terms continue to increase at a record rate outside the pandemic-affected period. Coupled with lower inflation, this means people’s real pay is no longer falling.”

The ONS warned, however, that other parts of the UK’s labour market are beginning to slow under the weight of interest rate rises.

The unemployment rate edged up from 4.2 per cent to 4.3 per cent and there was a drop in the total number of employed people to 75.5 per cent from 76 per cent in the previous month. The total number of vacancies in the economy also dropped below the million mark to 989,000 and has declined for 14 consecutive months.

The figures will be closely watched by the ratesetters at the Bank of England, as markets begin to speculate that the central bank may pause its monetary tightening this month after 20 months of aggressive action to quell inflation.

Andrew Bailey, the Bank of England governor, and Huw Pill, the Bank’s chief economist, have both hinted in the past week that they think interest rates are restrictive enough at the current 5.25 per cent to suck demand out of the economy and help reduce prices.

The labour market is a key indicator for future inflation, as high wage growth is likely to support consumer spending and sustain inflationary pressures. However, a recent rise in unemployment suggests that wage growth will subside later this year, as workers’ bargaining power to demand inflation-busting pay is reduced.

While most economists think that wage growth has peaked, some have warned that the pace of earnings growth will only fall back gradually, dropping to around 7 per cent by the end of the year, according to Sanjay Raja at Deutsche Bank. He warned that this is nearly double the rate that the Bank needs to see in order to ensure that inflation falls back to its 2 per cent target by 2025.

Yael Selfin, chief economist at KPMG, said she expected the Bank to raise rates again by another 0.25 percentage points as the high pay growth “continues to present a conundrum for ratesetters”.

The Monetary Policy Committee meets to make its next interest rate decision on September 21.

Read more:
Wages outstrip inflation for first time in over a year

0
FacebookTwitterGoogle +Pinterest
previous post
Luxury retailers are choosing China over London as ‘tourist tax’ bites
next post
5 key demands House conservatives are making before taking partial government shutdown off table

You may also like

Government launches £7m fund to bring digital access...

June 6, 2023

How to Handle Property Inheritance: a Guide for...

August 15, 2024

UK Christmas shoppers urged to return to high...

December 13, 2022

Amazon makes shock last-minute bid to buy TikTok...

April 2, 2025

The Future of Marketing: Integrating SMS and AI...

April 18, 2024

Key benefits & how to implement business process...

November 27, 2023

Lloyds Banking Group Faces Profit Decline Amidst Heightened...

April 24, 2024

Chad Chancellor – the successful business professional and...

December 14, 2022

Cost-of-living crisis: The benefits of supporting local and...

March 27, 2023

Manufacturing slumps to lowest level in 31 months

January 4, 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

    • ‘Gone too far’: GOP lawmakers rally around Trump after Musk raises Epstein allegations

      June 6, 2025
    • Democrats begin to embrace Musk amid Trump spat after party railed against him as a ‘dictator’

      June 6, 2025
    • Trump administration defends US and Israeli sovereignty with new sanctions against four ICC judges

      June 5, 2025
    • Musk unleashes wild Epstein claim against Trump after being booted from DOGE

      June 5, 2025
    • Three Charts Showing Proper Moving Average Alignment

      June 5, 2025
    • Biden only hand-signed one pardon during final spree, and it was his most controversial one

      June 5, 2025

    Categories

    • Business (8,149)
    • Investing (2,011)
    • Politics (15,542)
    • Stocks (3,129)
    • 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