Wage growth reaches decade-high as UK jobs rate soars to record levels

UK wages are now growing faster than any time since around the end of 2016, as workers received their biggest pay rise in a decade in the three months to October.

Data published today by the Office for National Statistics (ONS) revealed average weekly earnings rose an annual 3.3 per cent in the three months to October, its biggest increase since the three months to July in 2008.

Analysis from accountancy firm EY suggested the growth in earnings could "fuel Bank of England (BoE) confidence that pay growth is now on a firming trend amid labour market tightness".

However, it said the BoE is "highly unlikely" to raise interest rates again until after the UK leaves the European Union in March next year, "given the major uncertainties over a Brexit 'deal' that are occurring in the run-up to the UK's departure".

The proportion of people employed in the UK rose to 75.5 per cent in October, reaching its joint-highest rate since comparable estimates began almost fifty years ago. The number of unemployed people also rose, but the number of people aged between 16 and 64-years-old not working and not seeking work, known as economically inactive, decreased.

There were an estimated 32.5m people in work during the period between August and October this year. This was up 79,000 from between May and July, and more than 396,000 from the same time last year.

The unemployment rate was estimated at 4.1 per cent, unchanged from the previous period but lower than estimated for the same time last year at 4.3 per cent. There were an estimated 1.4m unemployed people over the three months.

"The employment rate has continued to rise in the most recent three months, returning to a joint record high, boosted by an increase in full-time workers," said ONS senior statistician Matt Hughes.

"There was a corresponding fall in the ‘inactivity rate’ – the proportion of people neither working or looking for a job – while the unemployment rate was virtually unchanged."

Minister of state for employment Alok Sharma said: "Today's statistics show the enduring strength of our jobs market, with wages outpacing inflation for the ninth month in a row and employment at a record high.

"This is benefiting people across the country, with almost 400,000 more people in work in the last year. Putting more money in the pockets of working families, and showing the UK remains a great place to invest and do business."