British wages jumped by 7.3% in the March to May quarter compared to the same period in 2022 driven by high inflation and a tight labor market. File Photo by Andy Rain/EPA-EFE
July 11 (UPI) — Wages for British workers continued to rise at a record annual pace in the March to May period as stubbornly high inflation and a tight labor market fueled demands for higher pay, the country’s main statistical agency said Tuesday.
Average pay excluding bonuses increased by 7.3% for the second straight quarter, a level not seen since 2021 when the economy was beginning to reopen after COVID-19, but fell by 0.8% in real terms because its value was eroded by prices rising at an even faster pace, according to Office for National Statistics estimates.
Wages rose across the board with private sector pay ticking up to 7.7%, from 7.6% in the previous period, led by finance and business services growth of 9% and manufacturing at 7.8%, up almost 1%, the highest growth rate since records began in 2001.
Public sector pay growth leaped 0.2% to 5.8%, its fastest pace in more than 20 years helping push the average weekly pay packet to $783, up from $756 in the February to April period.
“Pay excluding bonuses has again risen at record levels in cash terms. Due to high inflation, however, the real value of weekly earnings are still falling, although now at its slowest rate since the end of 2021,” ONS Economic Statistics Director Darren Morgan said in a Twitter post.
Wages continued their upward track due to a rise in the total employment rate to 76% despite unemployment rising to 4%, compared with 3.8% in the previous quarter, fewer job vacancies and an increase in the number of people, particularly men, actively seeking work after dropping out of the workforce during the COVID-19 pandemic.
The economic inactivity rate decreased by 0.4% on the quarter, to 20.8% in March to May, largely driven by those inactive for other reasons, for example, those looking after family or home, and those who are retired.
“Our job market is strong, with employment low by historical standards. But we still have around one million job vacancies, pushing up inflation even further,” said Chancellor Jeremy Hunt.
Britain’s consumer price inflation rate is stuck at close to 9%, the highest among the advanced economies, with policymakers seemingly powerless to bring it under control despite 13 consecutive interest rate rises by the central bank.
Critical core inflation, which strips out volatile energy, food, alcohol and tobacco prices, jumped by 0.3% in May to 7.1%, its highest level in 31 years.
