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UK wage growth has surpassed inflation, reveal ONS figures

UK wage growth has surpassed inflation, reveal ONS figures

Pay inflation has picked up last month and surpassed inflation, according to official data.

Concerns about the UK’s slow wage growth have been growing in the past few months as employment rates have risen steadily. But new figures from the Office for National Statistics (ONS) show that last month, pay increases finally surpassed inflation.


The data shows that at six per cent, unemployment actually remained flat in the six months to September, which was slightly below analyst expectations.

It still means that 30.79 million people were in work – nearly 700,000 more than there were a year earlier – but it does mean that the upturn in the labour market has been slowing down a little.

Yet it seems that this limited improvement came as a trade-off for an increase in pay. Wages grew by 1.3 per cent over the period. Considering that the consumer prices index (CPI) stood at 1.2 per cent in September, this suggests that wages have finally started to surpass inflation.


Overall the pace is still slow, and years of below-inflation pay increases mean there is still a lot of catching up to do to relieve the pressure on living costs across the UK.

But if this can be translated into longer-term growth, the nation could well be on its way towards a better pay packet.

“It’s good to see an increase in real wages after so many years of falling living standards, but at today’s rate of wage growth it would take another twelve years for people’s pay to be worth what it was before the recession,”said Frances O’Grady, general secretary of the TUC.

But David Kern, chief economist at the British Chambers of Commerce, said the figures still point to a positive outlook for both pay and the job market as a whole.

“These figures highlight once again that the UK labour market remains strong, and that the pace of economic growth continues at a steady pace,” he explained. “Pay rises have increased but remain weak, and living standards are still under pressure. Despite this, these figures suggest that there is considerable scope for the economy to continue expanding steadily.”

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