Wage growth outstrips inflation for the first time in 18 months
Wage growth has outstripped inflation for the first time in more than 18 months as it continued to surge at a record pace, new figures show.
Average regular earnings growth excluding bonuses remained at a record high of 7.8 per cent in the three months to July, the Office for National Statistics (ONS) said.
Wage growth was the same as last month, but inflation has fallen to a 16-month low of 6.8 per cent in the year to July, according to the latest data.
It is the first time since October 2021 that wages have overtaken inflation, which soared to a 40-year high of 11.1 per cent last October as the cost of living crisis saw household energy and food bills skyrocket.
Annual growth in pay including bonuses leapt by 8.5 per cent in May to July, with earnings boosted by one-off payments to NHS and civil service staff.
The rate of unemployment rose to 4.3 per cent from 4.2 per cent in the same period, the highest jobless total in almost two years.
Darren Morgan, ONS director of economic statistics, said: “Earnings in cash terms continue to increase, at a record rate outside the pandemic-affected period.
“Coupled with lower inflation, this means people’s real pay is no longer falling.”
Chancellor Jeremy Hunt said: “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.
“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.”
(This story is being updated)
