UK average wages surged upwards with pay rises of 8.2% pa (excluding bonuses) for the year to June 2023 according to figures released by the Office for National Statistics (ONS) today.
This is the highest increase rate in weekly wage inflation since 1998 i.e., 25 years
With June consumer prices index (CPI) inflation at 7.9% pa and expected to fall tomorrow to below 7% pa, this now means that pay is increasing faster that prices. This has many repercussions:
Comment
With all of the above, stock markets are taking a hit today with FTSE 100 falling 1.6%. Investors are nervous and with the risk of recession, this is pushing stock markets down as investors look to safe havens including bank and building society interest rates looking increasingly attractive with some banks already offering 7% pa to savers.