by According to official figures, wages are still rising, but at a slower pace, as the unemployment rate has fallen unexpectedly.
Data from the Office for National Statistics (ONS) shows that salaries (excluding bonuses) rose by 5.4 percent in the three months to June, less than the 5.8 percent increase in the previous month.
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Although this figure was high, according to the ONS it was last at this low level two years ago.
When price increases (measured by inflation) are taken into account, wages rose by 3.2 percent, according to the figures.
The long-standing trend of wages rising faster in the private sector than in the public sector continued to be halted.
In the public sector, wage growth was 6%, while wages in the private sector rose by 5.2%.
What happens to unemployment?
The proportion of people who are unemployed and looking for a new job fell to 4.2 percent in July, the ONS said.
Economists had predicted an increase. Those surveyed by the Reuters news agency expected an increase to 4.5 percent, up from 4.4 percent. recorded a month ago.
A low unemployment A lower interest rate can be an indication of a healthy economy and increase pressure for rising wages.
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Mixed signals for interest rates
Economists had expected such strong wage growth, which probably means that there will be no major changes in the Bank of England’s interest rate policy.
High interest rates mean more expensive loans.
The markets currently expect the key interest rate to remain unchanged at 5% However, this could change when the Monetary Policy Committee next meets in September, although data on economic growth and inflation to be released in the next few days could change this.
However, the ONS warned against reading too much into its own labour market figures, as they could potentially be revised.
People who neither have a job nor are looking for a job
The number of people who are unemployed and not looking for a job is 22.2%, higher than a year ago, but remains at roughly the same level as in the last three months.
These people are described as economically inactive.
The total number of hours worked per week is higher than last year, reaching 1.06 billion hours from April to June 2024.
“Today’s figures show that more needs to be done to help people find work. Because anyone who can work should work,” said Chancellor Rachel Reeves.
“This will be part of my Budget later in the year, where I will be making difficult decisions on spending, benefits and tax to repair the foundations of our economy so we can rebuild Britain and make every part of our country better off.”
