Average earnings in the UK have been growing at the fastest rate since 2009, according to official estimates.
The Office for National Statistics has said that between May and July, average earnings, excluding businesses, grew 2.9% compared with the same period last year.
However, umemployment also rose by 10,000 from the 1.82 million people last quarter. Interestingly, the rate of unemployment was 5.5%, unchanged from the last quarter but down from 6.2% last year.
Average earnings grew by 2.9% including bonuses, but this was a tiny bit lower than the 3.3% seen in the three months leading up to May.
Chief economist at Markit, Chris Williamson, had this to say: “The long-awaited upturn in pay, which has been the missing element of the UK’s economic recovery, looks to be finally upon us, reviving the prospect of a rate hike by the end of the year. Strip out the public sector, and private sector pay rose at an annual rate of 3.4% (both including and excluding bonuses) in the three months to July. This is a rate of increase that would normally worry policymakers into a pre-emptive hike in interest rates to avoid upward wage pressures feeding through to higher inflation.”
The pound rose every so slightly against the euro by one cent, and was also up 0.7 cents against the dollar.