Toby Melville/Reuters
Workers in London’s Canary Wharf financial district on August 3rd
London
CNN
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wage The UK saw a 7.8% increase in the three months to June, the fastest annual rate since records began, the Office for National Statistics said. Said Tuesday.
“Combined with lower inflation, this means people are getting back on their feet on real wages,” said Darren Morgan, director of economic statistics at the ONS.
England consumer price June rose 7.9% compared to June 2022.
The data should worry policymakers at the Bank of England. They’re already worried about big wage growth. fuel inflation.
The central bank has implemented policies for the 14th consecutive time. interest rate rise Earlier this month, the benchmark rate hit 5.25%, the highest since February 2008, in the long-running battle to contain inflation.
“With wage growth still accelerating, this supports our view that the Bank of England will deliver further wage growth.” [quarter-percentage-point] “We need to raise rates before the tightening cycle ends,” said Ruth Gregory, deputy chief UK economist at Capital Economics.
But the ONS data also showed signs of a cooling labor market, which policymakers would welcome, Gregory added.
The unemployment rate trended higher in the quarter to June, rising to 4.2%, but remains low by historical standards.
On the other hand, the number of job openings decreased by 66,000 in the three months to July compared to February to April, but still exceeds 1 million.
“There are now more than 250,000 fewer job vacancies than this time last year, but they are still well above pre-COVID levels,” ONS’s Morgan said.
Against this backdrop, UK businesses are facing increasing pressure to pay higher wages to compete in the labor market.
A quarterly survey of 2,000 UK employers released on Monday by the Chartered Institute for Human Resource Development found that 40% of employers have tried to retain employees who have another offer over the past year. It is said that he made a reverse offer to
The survey found that 38% of them offered a salary that was similar to their new job, and 40% offered a higher salary. The CIPD said it “expects an increase in the use of counter-offers as recruitment and retention challenges continue.”
Private sector wage growth outpaced inflation for the first time in over a year. Average regular salary growth, excluding bonuses, accelerated to 8.2% in the April-June quarter compared to the same period in 2022, the ONS said. The Bank of England sees the move as an indicator of domestic inflationary pressures.
Average gross salary growth for private and public sector employees, including bonuses, also stood at 8.2%, but the ONS said the data was impacted by one-off bonuses paid to health care workers. .
EY ITEM club’s chief economic adviser, Martin Beck, said the latest labor market data showed “few signs that the growing slackness in the job market is putting wage growth in discipline.” .
“There were no major downside surprises in tomorrow’s inflation data, but there was a new surprise. [interest] A rate hike in September is highly likely. ”
Official data due Wednesday are expected to show inflation slowing to 6.8% in July, according to a Reuters poll of economists.