Wage Growth Still Higher Than Inflation

Published / Last Updated on 10/09/2019

The Office for National Statistics (ONS) has today released figures showing that wages are continuing to grow and employment figures remain high.

In the May to July period earnings excluding bonuses grew at an estimated annual rate of 3.8% only a little lower than the previous quarter.

In the same period, earnings including bonuses were at the highest rate since mid-2008 at an annual pace of 4%.

The estimated employment rate stayed at 76.1% whilst unemployment rate dropped to 3.8%.

Comment

With Consumer Prices Index (CPI) inflation at 2.0% pa and wages growth at 4% pa, this means that as we have more money, we spend more, we save more and indeed having more will create inflation and interest rate pressure.  We suggest wages growth is also due to employers neediing to pay more to secure quality staff given many foreign workers are not coming to the UK and with emloyment at a record high, it speaks for itself.

Expect inflation after any Brexit shock.

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