Average pay in Britain is rising at its fastest rate since the middle of the financial crisis, official figures show.
Weekly wages including bonuses increased by 3.7% in the year to June to £538, the highest increase in 11 years, according to the Office for National Statistics (ONS).
Average earnings rose by 3.9% excluding bonuses, also the highest rate in more than a decade.
The rise is likely to be linked to a period of record employment that figures today also show is holding up despite growing warnings signs, with the employment rate at a joint-record high of 76.1%.
But the figures also showed a rise in zero-hour contracts, up 15% in the past year.
“There is more good news for those who already have a job,” said Pawel Adrjan, UK economist at the job site Indeed.
“Average wages continue to march upwards at their highest rate since August 2008 as employers fight for recruits by offering ever more competitive salaries.”
Construction saw the biggest gains in pay at 5.9%, which could be a result of growing skills shortages in a sector reliant on increasingly tight supply of EU workers. Average pay now stands at £646 a week.
Pay growth was weakest in manufacturing and the wholesale, retail, hotel and restaurant sectors, rising 2.4%.
The figures suggest Britain has seen strong pay growth since April 2018, but real pay when adjusted for rising everyday costs is still lower than more than a decade ago.
Real total pay including bonuses is still £26 less than in February 2008.
The ONS labour market report published on Tuesday said record high employment was likely to be pushing up wages.
“The strong pay growth may be linked to the tightening labour market that is characterised by high and increasing employment, high numbers of vacancies, more people leaving economic inactivity, and historically low unemployment,” it said.
“Firms are faced with a small and shrinking pool of labour. This puts upward pressure on wages as firms try to attract and retain new workers.”
The ONS added: “The uncertainty about the UK leaving the European Union, by causing reduced capital investment, may be indirectly contributing to wage growth because firms are opting to employ more workers (despite the shrinking pool of labour) than to invest in new capital equipment.”
Monthly UK jobs data has been published by @ONS showing:— Indeed UK (@IndeedUK) August 13, 2019
Employment ⬆️ to 76.1%
People in work ⬆️ to 32.8m
Wage growth⬆️ by 3.9%
Vacancies ⬇️ to 820,000
But Laura Gardiner, research director at the Resolution Foundation thinktank, said: “The question is how long this calm can be sustained, with the economy contracting and productivity falling for the fourth consecutive quarter. Turning this around has to be a top priority for the new government.
“And while the labour market overall is in rude health, the significant rise in zero-hours contracts shows that job quality remains a concern, particularly for young people.”
Amber Rudd, minister for work and pensions and for women and equalities, said: “More people in work than ever before means more households across the UK are earning a regular income, and millions more receiving a pay boost thanks to wages rising at their fastest in a decade – outstripping inflation for a 17th month in a row.
“Our workforce increasingly reflects our vibrant society, with a record number of women in employment while the number out of work falls to an all-time low.”