UK households’ spending power has increased, with new figures showing that wage growth in July was higher than inflation for the first time in more than a year.
Regular pay, excluding bonuses, rose by 7.8% in May to July 2023 compared with the same period a year earlier, the Office for National Statistics (ONS) said.
This was ahead of the consumer prices index (CPI) measure of inflation for July which eased to 6.8%, from 7.9% in June.
“Earnings in cash terms continue to increase, at a record rate outside the pandemic-affected period,” said ONS director of economic statistics Darren Morgan. “Coupled with lower inflation, this means people’s real pay is no longer falling.”
The monthly report also revealed an increase in the unemployment rate, from 4.2% to 4.3%, and a decrease in job vacancies.
“Job vacancies have fallen below the million mark for the first time since the summer of 2021, when the reopening of economy created huge demand for workers,” Morgan said. “However, they still remain significantly above pre-Covid levels.”
The number of working days lost to strikes rose in July, primarily in the education and heath sectors, but the overall number is still below what it was a few months ago.
