WAGES across the UK have been rising at their fastest rate on record, the Office for National Statistics (ONS) has said.
Official figures revealed that this is the highest regular annual growth rate the ONS has seen since records began in 2001.
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Annual growth in pay stood at 7.8% in April to June this this year.
In comparison, average total pay, which included bonuses, was 6.9% and growth in regular pay, excluding bonuses, was 7.3% in the three months from March to May.
Darren Morgan, director of economic statistics at the ONS, said: “Earnings continue to grow in cash terms, with basic pay growing at its fastest since current records began.
“Coupled with lower inflation, this means the position on people’s real pay is recovering and now looks a bit better than a few months back.”
However, taking into account inflation means that wages only rose by 0.5% for total pay and 0.1% for regular pay.
Wages have been rising at the same rate as inflation which has helped ease some pressure on household budgets.
Basic pay and other related data is published each month by the Office for National Statistics (ONS).
It’s a non-ministerial department which reports directly to Parliament.
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Every month the body publishes estimates of employment, unemployment, inactivity, average weekly earnings, vacancies and other labour market-related statistics for the UK.
The data that is published typically looks at the three months up to a specific month – for example the latest publication was for April to June.
Chancellor of the Exchequer Jeremy Hunt said: “Thanks to the action we’ve taken in the jobs market, it’s great to see a record number of employees.
“Our ambitious reforms will make work pay and help even more people into work – including by expanding free childcare next year – helping to deliver on our priority to grow the economy.”
The rate of UK unemployment increased in the three months to June even as pay grew at the fastest rate since records began, according to the ONS.
Unemployment rate hit 4.2% during the quarter, up 0.3 percentage points from the previous three-month period.
It is the highest since the three months to October 2021, the ONS said, and brings the measure above pre-pandemic levels.
What does it mean for my money?
The main concern when workers see a “real-terms” fall in their salary is that it’s not keeping up with the cost of living.
It means people’s pay packets have fallen in real-terms, when factoring in other living costs such as food and energy.
Although this is a smaller fall than in previous months.
Wage growth is still behind inflation as prices of everything from groceries to energy bills increase at a faster rate.
Official food inflation figures showed it was starting to ease in June but high labour costs will prevent prices falling back as low as they had been, according to Sainsbury’s’ boss.
The UK’s rate of inflation dropped more than expected to 7.9% in June this year.
The Consumer Price Index level of inflation decreased from 8.7% in May.
City economists had predicted that last month’s inflation would fall but to 8.2%, so it is lower than expected.
Inflation is a measure of how the price of goods and services has changed over the past year.
Grocery inflation slowed to 16.5 per cent, the lowest level since the start of the year but still one of the highest levels in 15 years.
Jack Kennedy, senior economist at Indeed, said: “There are signs the cost of living could finally start to ease after record annual pay growth drove pay above inflation for the first time in over one-and-a-half years.
“While the wage growth figures will grab attention, the ONS data also showed the labour market continuing to rebalance.
“The unemployment rate jumped by a larger than expected 0.3 percentage points to 4.2%, driven by an increase in long-term unemployment and more people moving out of inactivity.”
Households are having to fork out an extra £833 compared to last year. And economists warn prices will stay “higher for longer”.
Prices are still considerably higher than they were at the start of 2022, with bread and butter more than 20% more expensive.
It means you will be feeling the pinch as your income doesn’t go as far and may end up struggling to pay your bills.
To make matters worse rising wages have been blamed for actually keeping inflation high by Bank of England bosses.
Earlier this month, the BoE hiked rates yet again to a new 15-year high.
The last time it stood at 5.25% was in March 2008.
The Bank’s Monetary Policy Committee (MPC) has lifted the base rate by 0.25 percentage points to 5.25%
High-street banks use the BoE base rate to work out the interest rates it offers to customers.
A further hike means the cost of borrowing, including loans, credit cards and mortgage repayments could become more expensive.
Consecutive hikes from historic lows have piled pressure on homeowners, with more to come if they rise again.
The government has brought in more support for those struggling with higher monthly payments, including extending the term of their mortgage and moving to interest-only repayments.
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