Wages And Employment On The Rise

Official figures have revealed that weekly earnings including bonuses rose by 1.7 per cent in the three months to February, outstripping inflation and halting the five-year squeeze on living standards.

Since inflation, as measured by the Consumer Prices Index (CPI), dropped to 1.6 per cent in March, workers in the UK may be poised for their first real income growth for a long time.

The Office for National Statistics (ONS) reported today (April 16) that earnings are now officially higher than inflation for the first time in six years, apart from for two months in 2010.

However, it may be some years before living standards are back to pre-recession levels and the Office for Budget Responsibility (OBR) has predicted that incomes will not return to their 2009-10 levels until at least 2018.

That said, there was more good news today on employment, as separate figures from the ONS for the three months to the end of February revealed that the number of people out of work in the UK has fallen by 77,000, taking it to a five-year low of 2.24 million.

This means that the unemployment rate now stands at 6.9 per cent of the adult working population. This is the first time since the start of the financial crisis that the rate has fallen below 7 per cent and, at just over 30 million, represents the highest number of people in work in a generation.

Although 7 per cent was the original marker set by the Bank of England for it to consider raising interest rates, Bank Governor Mark Carney amended the thresholds earlier this year to encompass other indicators, such as spare capacity in the economy.