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UK wages continued growing at the fastest pace on record in the three months to July, despite a weaker jobs market in which unemployment has risen and hiring slowed, official data showed on Tuesday.
The Office for National Statistics said annual growth in average pay, excluding bonuses, remained at 7.8 per cent — the highest rate since comparable records began in 2001. Total pay grew by 8.5 per cent, boosted by one-off payments to NHS workers and civil servants following pay deals to end strike action.
This means average wages are now growing faster than inflation — a development that will bring welcome relief for households, but is likely to reinforce the Bank of England’s concerns over inflation.
The pound edged up 0.06 per cent in early trading to $1.2515. Swaps markets are pricing in a probability of almost 80 per cent that the Bank of England will lift rates by 0.25 percentage points to 5.5 per cent on September 21.
“It’s heartening to see the number of employees on payroll is still close to record highs and that our unemployment rate remains below many of our international peers,” said chancellor Jeremy Hunt. “Wage growth remains high, partly reflecting one-off payments to public sector workers, but for real wages to grow sustainably we must stick to our plan to halve inflation.”