UK pay growth soars and employment hits record high

British workers’ pay has reached its highest level in the last two years and the employment rate has hit a record high, according to the Office of National Statistics.

British commuters Source: Bloomberg

British workers average weekly earnings, including bonuses, has hit its highest level in the last two years in November, increasing 3.4% representing the biggest increase since July 2018, according to data released by the Office of National Statistics (ONS).

Furthermore, the number of British people in employment has increased by 141,000 to hit a record high of 32.54 million in the three months to November, the ONS said.

Britain’s job market boom

The UK’s job market has boomed in recent months, with record vacancies and more than 100,000 people over the three months to November returning to work after being unemployed – driving the unemployment rate down to 4%, its lowest level since the mid-70s.

‘Earnings growth extended its recent firmer trend in November, indicating that the tight labour market is pushing up pay - after suffering a relapse earlier this year,’ Chief economic adviser to the EY Item Club Howard Archer said. ‘There is certainly survey evidence that labour market tightness is pushing up starting salaries and pay for workers switching jobs.’

‘However, employers currently appear to be still only offering modest pay increases for their existing staff,’ he said. ‘It appears that some companies have been encouraged in giving modest pay rises to existing staff by a reluctance of many workers to change their jobs amid heightened economic uncertainties, with Brexit being a significant factor in this.’

Brexit uncertainty looms large over UK economy

But despite the recent pay and employment figures providing a degree of optimism for the UK economy, there are some that argue that the ONS data flies in the face of many British employers’ pessimistic outlook amid a myriad of macroeconomic headwinds.

‘The summer was a good time for the UK economy and so wage and jobs numbers reflect a time of strong business confidence, heightened productivity and relative political calm. Remember that?’ Chief economist at WorldFirst Jeremy Thomson-Cook said.

‘We do expect inflation to run higher eventually as wage pressures build but, for now, uneasy business sentiment will cap that impulse and will likely do so until Westminster and Brussels agree something more concrete than the simple need for a deal by 29 March,’ he said.

‘As it stands however, given these numbers and in the event of a deal on Brexit and a smooth exit from the EU at the end of March, the Bank of England could very easily raise interest rates in May,’ he added.

See an opportunity to trade?

Go long or short on more than 15,000 markets with IG.

Trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.

Related articles

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Bid
Offer
Updated
Change
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

Prices above are subject to our website terms and agreements. All share prices are delayed by at least 20 minutes. Prices are indicative only.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.