Yahoo Finance UK pay growth strong despite economic slowdown fears
Workers’ basic pay is growing at the fastest rate in cash terms for more than a decade as the British labour market continues to defy the slowdown in the economy.
Despite some signs of weakness, the latest data from the Office for National Statistics showed annual average earnings growth at 3.6% in the three months to May – comfortably exceeding the increase in the cost of living.
The ONS said that between March and May – a period that saw the UK gripped by Brexit uncertainty – there had been a small rise in employment and that the jobless rate had remained at 3.8% – its lowest level since the mid-1970s.
Recent surveys of the economy have painted a bleak picture of mothballed investment and empty high streets, but unemployment as measured by the internationally agreed yardstick fell by 51,000 over the quarter to stand at 1,292,000.
The official data picked up some signs that the UK’s jobs boom is fading, with employment rising by just 28,000 in the latest quarter. There was a fall of 58,000 in full-time employment, offset by an 86,000 increase in part-time work. A rising working-age population meant the employment rate fell slightly.
The employment minister, Alok Sharma, said: “Wages outpacing inflation for 16 months in a row, more people in work than ever before and joint-record female employment, means better prospects for many thousands of UK families and shows the continued resilience of the UK labour market.”
The ONS said total pay – which includes bonuses – was 3.4% higher in the three months to May than in the same period a year earlier.
Growth in earnings is being closely monitored by the Bank of England’s monetary policy committee as it assesses whether there is a need to raise interest rates. But the likelihood that the economy moved sideways at best during the second quarter of 2019 is expected to stay the MPC’s hand.
Matt Hughes, the ONS deputy head of labour market statistics, said: “The labour market continues to be strong, with the employment rate still at a near-record high and unemployment down again. The number of self-employed part-timers has passed 1.5 million for the first time, well over double what it was 25 years ago.
“Regular pay is growing at its fastest for nearly 11 years in cash terms, and its quickest for over three years after taking account of inflation.”
