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| Wage growth picks up as UK unemployment falls | Wage growth picks up as UK unemployment falls |
| (35 minutes later) | |
| Wage growth in the UK is picking up, figures from the Office for National Statistics (ONS) indicate. | Wage growth in the UK is picking up, figures from the Office for National Statistics (ONS) indicate. |
| In the August-to-October period, average earnings excluding bonuses were up 1.6% from a year earlier. Including bonuses, earnings rose by 1.4%. | In the August-to-October period, average earnings excluding bonuses were up 1.6% from a year earlier. Including bonuses, earnings rose by 1.4%. |
| It is the first time for six years that both measures of earnings growth have been above the inflation rate. | It is the first time for six years that both measures of earnings growth have been above the inflation rate. |
| Meanwhile, the number of people unemployed in the quarter fell by 63,000 to 1.96 million. | Meanwhile, the number of people unemployed in the quarter fell by 63,000 to 1.96 million. |
| The fall was the slowest quarterly fall for a year, leading some analysts to speculate that the rate of improvement may have peaked. | The fall was the slowest quarterly fall for a year, leading some analysts to speculate that the rate of improvement may have peaked. |
| The jobless rate was 6%, matching its lowest level in six years. | The jobless rate was 6%, matching its lowest level in six years. |
| The ONS figures also showed that there were 30.80 million people in work in the three-month period, 115,000 more than for the May-to-July period, driven by more people in full-time work. | The ONS figures also showed that there were 30.80 million people in work in the three-month period, 115,000 more than for the May-to-July period, driven by more people in full-time work. |
| The number of people claiming Jobseeker's Allowance in November fell by 26,900 to 900,100. | The number of people claiming Jobseeker's Allowance in November fell by 26,900 to 900,100. |
| 'Decent improvement' | 'Decent improvement' |
| For the month of October alone, pay including bonuses, increased by 1.8%. That compares to an inflation rate of 1.3% in the same month. | |
| November's inflation figures were released on Tuesday and showed it falling further - to a 12-year-low of 1%. | |
| Bank of England policymakers expect that trend to continue. | |
| Earlier on BBC Radio 5 live, the Bank of England's deputy governor, Jon Cunliffe, said UK inflation in the coming months was "going to be low". | |
| Analysts were encouraged by the earnings growth. | |
| "Earnings growth is finally starting to open a clear positive gap over inflation, which is serious good news for consumers," said Howard Archer, economist at IHS Global Insight. | "Earnings growth is finally starting to open a clear positive gap over inflation, which is serious good news for consumers," said Howard Archer, economist at IHS Global Insight. |
| "This bodes well for consumer spending in 2015, although it needs to be borne in mind that consumers have faced a prolonged squeeze on their purchasing power. | "This bodes well for consumer spending in 2015, although it needs to be borne in mind that consumers have faced a prolonged squeeze on their purchasing power. |
| "Meanwhile, the labour market is still seeing decent improvement, although the underlying rate of improvement is showing signs of moderation," he added. | "Meanwhile, the labour market is still seeing decent improvement, although the underlying rate of improvement is showing signs of moderation," he added. |
| However, TUC general secretary Frances O'Grady said the figures showed "some long overdue improvements, but at this rate it will take over a decade to recover the real value of people's earnings". | |
| In a tweet, Prime Minister David Cameron said: "Employment is at a record high & average earnings are rising faster than inflation. More to do, but our long term economic plan is working." | In a tweet, Prime Minister David Cameron said: "Employment is at a record high & average earnings are rising faster than inflation. More to do, but our long term economic plan is working." |
| Deflation risk | Deflation risk |
| But Rachel Reeves, the shadow secretary for work and pensions, said some groups were still struggling to find work. | But Rachel Reeves, the shadow secretary for work and pensions, said some groups were still struggling to find work. |
| "Long-term youth unemployment has risen over the last few months. So there's still much more that the government needs to do." | "Long-term youth unemployment has risen over the last few months. So there's still much more that the government needs to do." |
| Separately, minutes from the last meeting of the Bank of England's Monetary Policy Committee (MPC) showed that policy makers again voted 7-2 to keep interest rates on hold at 0.5%. | Separately, minutes from the last meeting of the Bank of England's Monetary Policy Committee (MPC) showed that policy makers again voted 7-2 to keep interest rates on hold at 0.5%. |
| MPC members Ian McCafferty and Martin Weale continued to vote for a rise in rates to 0.75%. | MPC members Ian McCafferty and Martin Weale continued to vote for a rise in rates to 0.75%. |
| However, the majority of MPC members felt that pay growth had to accelerate before inflation would begin to approach the Bank's target of 2%. | However, the majority of MPC members felt that pay growth had to accelerate before inflation would begin to approach the Bank's target of 2%. |
| Coupled with the risk of deflation, analysts said that interest rates could remain at their record low for some time. | Coupled with the risk of deflation, analysts said that interest rates could remain at their record low for some time. |
| "Indeed, given the weight of downward pressure on prices, there is a far from minimal chance that rates could stay on hold throughout 2015," said Martin Beck, senior economic adviser to the EY Item Club. | "Indeed, given the weight of downward pressure on prices, there is a far from minimal chance that rates could stay on hold throughout 2015," said Martin Beck, senior economic adviser to the EY Item Club. |
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