UK Average Wages See Strong Growth

The average wage in the UK has experienced strong growth over the last three months to July, beyond analysts previous predictions, whilst unemployment figures have continued to fall according to official figures released today.

The figures released today by the Office for National Statistics reflectd a 3.5% increase in the average wage on the year, despite very weak public sector wage rises over the same period and analysts predictions that wages would not rise as steeply as a result of a tightening credit environment and ongoing market volatility.

At the same time, the figures highlighted a decrease in official unemployment statistics, which were at their lowest point in over two years at 852,900, despite previous predictions of a much larger decrease.

Whilst the number of unemployed was down, the figures for those claiming benefits had not decreased by as significant a margin, reflecting the fact that unemployment still remains an issue in the UK economy at this time.

The news is likely to have attracted the attention of the Bank of England as a possible cause of inflationary pressure, and it is likely that the Monetary Policy Committee will consider their next interest rate decision in light of these figures.

However, with wage inflation still within the central Bank’s 4.5% comfort zone, and overall inflation in the UK still well within the official 2% target, it seems unlikely that this will be sufficient to prompt any further anti-inflationary measures on its own.

The increase in earnings has largely been attributed to increased bonus payments in the financial sector, according to the Office for National Statistics Report.

Meanwhile, it was the private sector that contributed to the bulk of the wage growth over the period, with the lack of public sector wage increases of hot political relevance at the moment.