• Wages rose by 3.2% in the three months to March
• Wages are still lower than before the recession, after inflation
• Unemployment at the lowest level in more than 40 years
Laura Suter, personal finance analyst at investment platform AJ Bell, comments on the latest wage growth figures:
“Average wages rose by 3.2% in the three months to March, a slight fall back on the previous period. However, after inflation pay rose by 1.3%, continuing the recent trend of wages rising above inflation. Wages have now been higher than inflation for more than a year, giving a welcome boost to household finances.
“After years of below-inflation increases, with workers hit with a torrid combination of sluggish wage growth and higher inflation, these rises should help to give some households more breathing space. We’ve started to see early signs of this already, with consumer spending increasing in April as warmer weather drove people out to the shops, according to data from the British Retail Consortium and KPMG.
“However, the hangover of the financial crisis is still hitting people’s pockets, as wages remain lower than before the 2008-09 recession once adjusted for inflation. Low UK unemployment has undoubtedly started to turn the tables in workers’ favour, with unemployment at the lowest level in more than 40 years, giving workers more power to boost their pay. What’s more, the ONS has found that more people are job-hopping, after a long period of fearing for their job security after the financial crisis, meaning that employers are paying more to keep good workers.”
Wage growth vs inflation
Source: Office for National Statistics
