Total pay in the UK has kept rising at its fastest rate since the financial crisis in 2008 – but only if you do not account for inflation.
Wages including bonuses rose by 3.5% per year in the last quarter, the same as a month ago. Basic pay rose by 3.4% per year, down from 3.5% last month.
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Stephen Clarke, the senior economic analyst of the Resolution Foundation, says: “This mini pay recovery is encouraging, but it is likely to be tested in the coming months as inflation is expected to start rising again.”
He adds that although “Brexit uncertainty has not caused businesses to put hiring plans on hold” it has “caused firms to put investment on hold, which may in turn affect productivity and the strength of pay growth in the longer term”.
TUC General Secretary Frances O’Grady was also dismissive, saying: “This modest pay growth is doing little for workers still feeling the effects of the longest pay squeeze for 200 years.”
She called on the government to raise the minimum wage to £10 “as quickly as possible” and give unions “the freedom to enter every workplace to negotiate fair pay rises”.
Economist Rupert Seggins also challenged the celebration, arguing on Twitter that one might expect “pay growth to be even higher than it is”.
Meanwhile, Britain’s employment rate has hit a new joint record high, of 76.1%. This a hop up from 75.4% a year ago. The employment rate for men is 80.5% and for women it is 71.8%.
But Thomas Pugh, UK economist at Capital Economics says gloomier times are imminent for the jobs market. “We suspect that this could mark the peak of employment growth as the Brexit uncertainty reached its crescendo,” he told The Times.