Home news Wages continue to lag behind inflation

Wages continue to lag behind inflation

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Average earnings continued to lag behind inflation in the three months to June, official figures show.

Wages grew by 2.1% compared with the same period last year, the Office for National Statistics said.

This is a slight increase on the previous March to May quarter when the ONS revised down its preliminary figure to 1.9%.

However, once inflation is taken into account, total pay in real terms sank by 0.5% both including and excluding bonuses.

It comes a day after official data showed inflation remained unchanged in July at 2.6%. Economists had expected it to climb to 2.7%.

The figures are significant as they show a continuation in the squeeze on living costs, largely thanks to the collapse in the pound following the Brexit vote, which makes imported goods more expensive.

Inflation remained static because increased food, clothing and electricity costs were offset by a drop in fuel prices.

As pay growth picked up pace, employment reached an all-time high, the ONS said.

The number of people in work rose by 125,000 to 32.07 million in the three months to June, with the employment rate climbing by 0.3% to a record 75.1%.

Unemployment fell by 57,000 to 1.48 million during the same period – a 12-year low – while the claimant count dropped by 4,200 in July to 807,800, figures showed.

Matt Hughes, senior labour market statistician at the ONS, said: “Despite the strong jobs picture, however, real earnings continue to decline.”

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Source: SKY