Wages rise faster than inflation for the first time in over 12 months

Written by Oliver Wade
15/05/2018

Wages rose at an annual rate of 2.9% in the three months to March, faster than in inflation for the first time in over a year, official figures revealed.

Over the same three-month period, inflation experienced a growth of 2.7%.

Wages were surpassed by inflation in February last year, applying pressure on individuals and household’s income.

The Office for National Statistics (ONS) also reported that unemployment figures fell by 46,000 to 1.42 million, while the jobless rate also fell to 4.2%, the lowest since 1975.

The Chancellor Philip Hammond said: “Growth in real wages means that people are starting to feel the benefit of more money in their pockets; another turning point as we build a stronger, fairer economy.

"The unemployment rate is at its lowest in over 40 years and with our National Living Wage we are making sure that the lowest-paid feel the benefit with an extra £2,000 a year."

However, despite the growth in wages, TUC general secretary Frances O’Grady stated that working people are “still not getting a fair deal”, with “millions” of jobs not paying a real living wage and the average weekly pay still worth much less than what it was a decade ago.

PwC chief economist John Hawksworth commented: “The rise in wages will be helpful as it follows a long period when wages have been falling relative to inflation, but wages are still lower in real terms than they were before the financial crisis. And this won't turn round things overnight."

The ONS reported that 75.6% of people aged between 16 and 64 were now in work, the highest levels recorded since records began in 1971, and the number of people employed increased by 197,000 in the January-to-March period, with the figure now are 32.3 million.

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