U.K. Wages Increase at Fastest Pace in Almost a Decade
Tuesday, 16 October 2018 15:53 WIB |
ECONOMY |Ekonomi inggris
U.K. wages are growing at their fastest pace in almost a decade, suggesting the economy is continuing to operate with little slack.
Average earnings excluding bonuses rose 3.1 percent in the three months through August, the most since January 2009, the Office for National Statistics said Tuesday. Unemployment held at a 43-year low of 4 percent.
While wage growth remains below its pre-crisis average, muted productivity means that even a modest pickup could fuel inflation as companies raise prices to protect their margins.
Bank of England officials raised interest rates in August, though Brexit uncertainty means no further increases are expected before Britain leaves the European Union in March.
There were some signs of weakness in the latest snapshot of the labor market, with employment falling for the first time since the autumn of last year. Unemployment declined, but only because of a sharp rise in the number of people counted as inactive, particularly students.
Wages are now growing faster than prices, providing relief for households squeezed by the inflation surge following the 2016 Brexit vote. Overall wage growth picked up to 2.7 percent, ahead of the 2.5 percent inflation rate in the period, and the BOE sees a pickup toward 3.5 percent next year.
Upward pressure on settlements is expected to come from the public sector, where millions of workers will this year benefit from the easing of a cap on pay increases in place since 2010. In the latest three months, regular public-sector pay rose 2.7 percent, the fastest pace since September 2012.
Source : Bloomberg