UK wage growth lowest rate in six months
08 August 18  /  News

Official figures show that UK pay growth has fallen to the lowest rate in six months, despite a fall in employment.

In the three months leading up to May, wage growth slipped from 2.8% to 2.7%, whilst unemployment fell by 12,000 to 1.41 million.

Wage growth has now slipped back further to 2.5%, and, whilst it remains above the 2.4% inflation rate, this could change if the year on year June figure shows an inflation rate rise to 2.6%, which is to be expected.

High rates of unemployment and low levels of employment are usually signifiers of rising wages. However, some economists believe that the creation of low-paid jobs since the financial crisis has damaged this correlation.

Wage growth is one of the figures used when the Bank of England assess the health of the economy. Whilst most are expecting the inflation rate to still rise in August, there is some uncertainty.

The Resolution Foundation said the Bank would need to decide if the poor growth in pay rate is “simply as good as it gets”.

Sources:
BBC News
The Guardian