The Office for National Statistics has just released its latest labour market survey, which show that average pay rises are now at 3.3%
Average Pay Rises At 3.3%
Average pay rises have now reached 3.3% for the period September to November 2018, compared with the equivalent quarter in 2017, according to the Office for National Statistics. This was up from 2.9% for the period May to July 2018. When bonuses are added in, the rate of increase for the 3 months to the end of November 2018 was 3.4%. Once adjusted for inflation, the real terms increase was 1.1% excluding bonuses, and 1.2. including bonuses. This contrasts with the position at the beginning of 2018 when their was a squeeze on living standards, where the rate of increase in pay was barely matching the increase in inflation, and prior to that a real terms decrease in pay with inflation outstripping pay rises. For example, in the 3 months to July 2017, pay in real terms both including and excluding bonuses fell by 0.4%
Office for National Statistics Survey
The Office for National Statistics found that for the 3 months to November 2018:-
- Average pay rises have increased by 3.3% excluding bonuses, and by 3.4% including bonuses, compared with the equivalent period in 2017. This represents the fastest rate of increase since July 2008, when average pay rises increased by 3.5% including bonuses and by 3.7% excluding bonuses
- Adjusted for inflation, the real terms increase in average pay rises excluding bonuses was 1.1%, and 1.2% when including bonuses
- Unemployment stands at 1.37 million (4% of the workforce), the lowest level since the 3 months to February 1975
- The number of people in work is 32.53 million, up 141,000 compared with the 3 months to August 2018, and up 328,000 compared to a year ago
- 8.65 million people are economically inactive (neither in or seeking work), an increase of 86,000 compared with a year ago
Inflation Falls to 1.8%, a 2 year low
As average pay rises have increased, UK inflation fell last month to a 2 year low of 1.8% in terms of the Consumer Prices Index (CPI) 12-month rate. This is down from 2.1% in December 2018, and is the lowest rate since January 2017, when inflation also stood at 1.8%. During the 2 year period between January 2017 and January 2019, inflation reached a high of 3.1% in November 2017.
The main reasons for the fall in inflation, were a fall in gas, electric, and petrol prices.
