The Office for National Statistics (ONS) has said that earnings is outstripping inflation in it’s fatest pace in two years.
In the three months to September, the ONS said excluding bonuses, the average regular earnings rose by 7.7%, this is down from the revised and record high of 79% of the previous three months.
Wages rose by only 1% after taking in to account the Consumer Price Index, and the UK’s unemployment rate is unchanged at 4.2% in the third quarter.
Darren Morgan, ONS director of economic statistics, said: “Our labour market figures show a largely unchanged picture, with the proportions of people who are employed, unemployed or who are neither working nor looking for a job all little changed on the previous quarter.
“The number of job vacancies fell for the 16th straight month. Nevertheless, vacancies still remain well above their pre-pandemic levels.
“With inflation easing in the latest quarter, real pay is now growing at its fastest rate for two years.”
Chancellor Jeremy Hunt said: “It’s heartening to see inflation falling and real wages growing, keeping more money in people’s pockets.”
Samuel Tombs at Pantheon Macroeconomics said: “Wage growth is slowing sufficiently quickly for the Monetary Policy Committee (MPC) to conclude that Bank Rate already is high enough at 5.25%.
“This slowdown should pave the way for the MPC to start to reduce Bank Rate from May, and probably by about 75 basis points over the course of 2024.”