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Wage growth highest in a decade, as UK employment soars to record levels

Data published today by the Office for National Statistics (ONS) has revealed that wages in the three months to October reached the highest level in a decade, with average weekly earnings riding by 3.3 per cent over the three month period, representing the biggest increase since 2008.

Statistics also showed an increase in full time employment.   ONS senior statistician Matt Hughes explained:

“The employment rate has continued to rise in the most recent three months, returning to a joint record high, boosted by an increase in full-time workers.” 

“There was a corresponding fall in the ‘inactivity rate’ – the proportion of people neither working or looking for a job – while the unemployment rate was virtually unchanged.”

Table 1: Summary of UK labour market statistics for August to October 2018, seasonally adjusted

Number (thousands) Change on May to Jul 2018 Change on Aug to Oct 2017 Headline Rate (%) Change on May to Jul 2018 Change on Aug to Oct 2017
Employed 32,476 79 396
Aged 16 to 64 31,233 96 329 75.7 0.2 0.6
Aged 65 and over 1,243 -18 67
Unemployed 1,380 20 -49 4.1 0.0 -0.2
Aged 16 to 64 1,365 21 -42
Aged 65 and over 15 -2 -7
Inactive 19,288 -24 -45
Aged 16 to 64 8,663 -95 -195 21.0 -0.2 -0.5
Aged 65 and over 10,624 72 150
Source: Labour Force Survey, Office for National Statistics

Minister of state for employment Alok Sharma said:

“Today’s statistics show the enduring strength of our jobs market, with wages outpacing inflation for the ninth month in a row and employment at a record high.  This is benefiting people across the country, with almost 400,000 more people in work in the last year. Putting more money in the pockets of working families, and showing the UK remains a great place to invest and do business.”

However commentators were quick to point out that the rise had to be taken in the context of ‘the longest pay squeeze in history.’

TUC General Secretary Frances O’Grady said:

“The rise in pay growth is little consolation for workers in the middle of the longest pay squeeze in 200 years, with real wages expected only to get back to pre-crisis level in 2024.  

“We need a plan that supports jobs and wages. That means the government putting the minimum wage up to £10 as quickly as possible. And it means giving unions the freedom to enter every workplace and negotiate fair pay rises.”