UK wage growth has accelerated to a record high as workers continue to push for pay rises to protect them from soaring inflation.
New data just released this morning shows that average pay (excluding bonuses) rose by 7.3% year-on-year in March to May 2023, the joint-highest reading on record if you exclude the pandemic period.
That’s stronger than expected. And the previous month’s data has been revised higher too, to show 7.3% wage growth in February-April too (up from 7.2%).
Economists had expected a small slowdown in pay growth today, to 7.1%, but this data suggests that wage inflation is more persistent – which will cause serious worries in the Bank of England, which fears a price-earnings spiral.
Total pay, including bonuses, also strengthened – growing by 6.9% in the last quarter.
This means wages are still lagging behind inflation, though, which was recorded at 8,7% in April and May,
Growth in factory pay was the highest since records began in 2001, with pay growth of 7.8% in manufacturing. The finance and business services sector saw the largest regular growth rate at 9.0%.
This morning’s data comes just hours after Bank of England governor Andrew Bailey and chancellor Jeremy Hunt called for wage and price restraint to help the fight against inflation.
In his annual Mansion House dinner, Baileytold City bigwigs:
“Both price and wage increases at current rates are not consistent with the inflation target.”