UK wages continue to outpace inflation, figures show
Official data show that wage packages for public and private sector workers have risen, with average wages continuing to outperform inflation.
According to the National Bureau of Statistics (ONS), wages rose 3.4% between October and December compared to the same period a year ago, considering the price speed.
The unemployment rate in the UK remains unchanged at 4.4%, although ONS recommends that its employment figures should be treated with caution due to the low response rate to employment surveys.
These figures follow the warnings that business intends Cut labor and raise prices before employment costs rise in April.
Employers raised concerns that paying more on national insurance, as well as rising minimum wages and lowering business tax rates, could increase wage increases and impact investments.
Inflation was not considered, ONS said annual salary growth (excluding bonuses) was 5.9% from October to December. This is 5.6% compared to the figure above.
The private sector saw revenue growth of 6.2%, while the public sector saw revenue rate of 4.7%.
The rate of inflation in the UK measures the exchange rate that consumer prices have risen over time, which was 2.5% as of December, but is expected to rise again due to higher energy and water fees.
Yael Selfin, chief economist at KPMG UK, said she expects compensation growth to be “steady downward” in the coming months.
Some economists suggest that the private sector wages that the Bank of England closely monitors are small when making decisions on interest rates, which will not lead policy makers to change their approach to “gradually” lowering borrowing costs.
Earlier this month, the bank lowered interest rates from 4.75% to 4.5%.
Pantheon’s Macroeconomics Rob Wood said rate setters will remain “cautious” after the recent wage growth figures.
Ms Selfin said the latest employment data showed that the hiring intentions of businesses were “significantly weakened”.
She said the hospitality and retail sectors are expected to be “disproportionately affected” by the cost of entering and exiting hiring a higher percentage of low-wage workers.
Jane Gratton, deputy director of Public Policy, deputy director of the UK Chamber of Commerce, added: “There are limits on how much additional costs the business can absorb without the harm of jobs and investment opportunities.”
“The government must do everything possible to minimize costs for businesses and ensure they have access to skilled and healthy employees.”
Starting April, employers will have to pay 15% of their national insurance for a salary of over £5,000, instead of their current salary of 13.8%.
The Treasury has repeatedly said its budget measures will provide the stability needed for steady corporate investment and growth, but fears that layoffs will affect UK economic growth, a major priority for the government in its efforts to improve living standards.
Recent survey of UK employers The suggested company can raise prices to cover the added costs.
If the company does raise prices, it could risk further increasing inflation in the coming months and putting more pressure on the household budget.
According to ONS, the total estimated vacancy fell by 110,000 (11.8%) from a year ago, but is still higher than the previous egg bank level. It also estimates that in January, the number of UK wage workers increased by 21,000 to 30.4 million.
Chris Eldridge, CEO of recruiting firms UK, Ireland and North America, said it was “waiting and seeing what happens in the job market in early 2025 ” situation.
“The first major test will be at the end of the quarter (March), when we saw changes in national insurance start and we have already obtained the background of the Employment Rights Act, we are still waiting to see what happens there .” he added.
