UK wage growth hits 11-year high

UK wages rose at their fastest pace since 2008 in the three months through to June, according to the Office for National Statistics.

Welcoming the news, Chancellor Sajid Javid said: “Today's figures are another sign that despite the challenges across the global economy, the fundamentals of the British economy are strong as we prepare to leave the EU.”

The 3.9% increase in regular pay - which excludes bonuses - was up from last month’s figure of 3.6%.

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The latest rise is being partially credited with the unusual timing of annual pay rises for public health workers last year, when a larger-than-usual increase was deferred until July.

Bloomberg says the data points to “on-going strength in the labour market” while Reuters says it shows the job market “shines”.

But The Guardian’s Phillip Inman isn’t so convinced.

“Employers haven’t increased pay by much for the bulk of workers,” Inman says. “The rise comes for those on the bottom pay scales and only then because the government increased the national minimum wage this year for more than two million workers by 4.9%.

“Pay rises for public sector workers in the spring, which were largely absent in previous years, also stand out as a fresh impetus for the rise in average regular wages.”

John Philpott, the director of the Jobs Economist consultancy, agreed that pay growth had been fuelled by spring pay rises for some public sector workers and people in jobs that benefited from the rising statutory minimum wage.

“The pick-up in pay growth should not therefore be interpreted as a sign that the labour market is tightening, which might signal mounting inflationary pressure. On the contrary, the jobs, vacancies and redundancies data suggest that demand for labour is cooling, albeit only slightly,” he said.