UK wage growth nears 10-year high

Wages in Britain have risen at their fastest pace since the 2008 financial crisis, according to the latest labour market figures from the Office for National Statistics (ONS).

Pay, excluding bonuses, grew by 3.2% in the three months to September, up from 3.1% in the previous quarter.

“With faster wage growth and more subdued inflation, real earnings have picked up noticeably in the last few months,” said Matt Hughes, ONS senior statistician.

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However, the TUC points out that wages are still below their pre-crisis level, once the cost of living is taken into account.

Wages are “rising at a snail’s pace and wages aren’t expected to return to their pre-crash value for at least another six years,” said General Secretary Frances O’Grady. “Boosting pay packets must be a priority.”

Meanwhile, unemployment also rose by roughly 21,000 in the third quarter, with the rate now standing at 4.1%.

The labour market report also revealed that there are 132,000 fewer EU nationals working in the UK compared with a year ago.

This was the “steepest annual drop” in the number of workers from Europe since the statistical agency began keeping track in 1997, according to the Financial Times.

With EU workers departing ahead of Brexit, the number of vacancies in the UK had hit a record high.

Mike Jakeman, senior economist at PwC, fears that firms will keep struggling to find staff, which could push wages higher, The Guardian reports.

“This data suggests that the labour market is now pretty tight. Unemployment remains very low in historic terms, but is unlikely to fall much further, given the slowdown in job creation,” he said.

The result of this “is likely to be further upward pressure on wages as companies struggle for find workers to fill vacancies,” Jakeman added. “We are likely to hear much more about worker shortages in the coming year.”