Tuesday, September 10, 2019

Good news on growth and wages

While it is wise not to place too much reliance on a single month's figures, the numbers for economic growth in the year to July which were published yesterday were encouraging.

The UK's economy grew faster than expected in July, easing fears that Britain could fall into recession. The economy grew 0.3% in July, according to the Office for National Statistics, the UK's official statistics body said, helped by the strong growth in the services sector.

Today we have figures for employment and growth which show

• Wages growing at their fastest pace since 2008
• Unemployment rate at lowest since 1974
• Employment rate at a joint record high

Earnings excluding bonuses grew at an annual pace of 3.8% in the May to July period, down slightly from the previous reading. Including bonuses, wages rose at an annual pace of 4% - the highest rate since mid-2008. The unemployment rate dipped to 3.8%, while the estimated employment rate remained at a record 76.1%.

Average wages have now been growing faster than inflation for a year, suggesting that for many people their pay packets are finally recovering from the effects of the recession which started in 2008.

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