Wage rises for UK employees have slowed, but remain ahead of inflation.
On average, regular earnings (excluding bonuses) grew at an annual rate of 5.7% in the three months to May, the Office for National Statistics (ONS) reported on Thursday. The growth rate was the same for total earnings (including bonuses).
Adjusted for inflation, regular pay grew by 2.5% in the same period and total pay was up 2.2%.
“Earnings growth in cash terms, while remaining relatively strong, is showing signs of slowing again,” said Liz McKeown, ONS director of economic statistics. “However, with inflation falling, in real terms it is at its highest rate in over two and a half years.”
Overall, the monthly figures show continued signs of gradual cooling in the labour market, with the number of vacancies still falling and unemployment rising.
There were 889,000 job vacancies in April to June 2024, down 30,000 on the quarter. The total has now been falling continuously for two years, although it remains above pre-pandemic levels.
The unemployment rate was estimated at 4.4% in March to May, up slightly on the quarter and on the year, and above pre-pandemic rates. An estimated 22.1% of working-age people were classed as economically inactive, which is above estimates of a year ago but down on a quarterly basis.
Alexandra Hall-Chen, principal policy advisor for employment at the Institute of Directors, said that while employers will welcome further signs of the labour market cooling, availability of skills remains a key issue.
Hall-Chen added added that bringing people back into the workplace and tackling skills gaps in the UK economy needs to be “front and centre” in the new government’s industrial strategy in order to achieve strong economic growth.
