Figures from the Office of National Statistics have shown that average earnings rose by 4.4% in the year to April 2006, which is due to the higher growth in private sector services. But the number of job vacancies has fallen, and growth in average earnings excluding bonuses has fallen, while growth in average earnings including bonuses has increased. The employment rate for people of a working age is 74.7% for the three months ending April 2006, at 28.94 million, which is the highest figure on record. Employment increased by 130,000 over the quarter, and 272,000 over the year.
Our view
Earnings generally always grow faster than inflation. This is why we are all becoming a little wealthier. It is also why pensioners become poorer because they do not earn and pensions generally increase with inflation.