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Wage growth picks up as UK unemployment falls | Wage growth picks up as UK unemployment falls |
(about 1 hour 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. | 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%. | 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. | 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". | 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. | 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". | 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". |
Analysis: Robert Peston, BBC economics editor | |
It has been a journey of a good six years, give or take the odd blip, but weekly earnings do now seem to be pulling ahead of Consumer Price Index (CPI) inflation. | |
This is especially true of the private sector, which accounts for 82% of jobs (and rising) - where average weekly earnings rose 2.2% in October, compared with inflation of 1.3% in that month and 1% in November. | |
The fastest wage growth was 3% in finance and business services - don't curse please, it's unbecoming - and 2.7% in construction. | |
The shrinking public sector saw a less-than-inflation 0.5% rise. | |
Read Robert's blog in full | |
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. |
Are you unemployed? Or have you recently found a job? Are you happy to speak to BBC News? Email your experience to haveyoursay@bbc.co.uk. Please remember to include your contact details if you are happy to speak to a BBC journalist. | Are you unemployed? Or have you recently found a job? Are you happy to speak to BBC News? Email your experience to haveyoursay@bbc.co.uk. Please remember to include your contact details if you are happy to speak to a BBC journalist. |
Have your say | Have your say |