UK wage growth slows to 5.7 per cent: ONS data

London, July 18 – The United Kingdom’s (UK) latest labour market data continued to show signs of cooling, as annual wage growth has slowed to 5.7 per cent, said the Office for National Statistics (ONS) on Thursday.

According to the ONS, average earnings, both excluding and including bonuses, grew at an annual rate of 5.7 percent in March to May 2024. Annual growth in real terms, which was adjusted for inflation, for regular pay was 2.5 per cent, and for total pay was 2.2 per cent.

“Earnings growth in cash terms, while remaining relatively strong, is showing signs of slowing again. However, with inflation falling, in real terms it is at its highest rate in over two and a half years,” said Liz McKeown, Director of Economic Statistics of the ONS.

The annual average regular earnings growth for the public sector remains strong at 6.4 per cent, and for the private sector, this is 5.6 per cent, according to the ONS, Xinhua news agency reported.

UK wage growth is still too hot to handle for the country’s monetary policymakers, the think tank Resolution Foundation noted.

“Rising real wages are good news for workers coming out of the cost-of-living crisis. But the Bank of England will be concerned that because these are not productivity-enhanced pay rises, they could turn out to be inflation-generating ones,” said Greg Thwaites, Research Director at the Resolution Foundation.

“The high-strength pay data, and low-quality jobs data, further complicate plans to cut interest rates,” Thwaites added.

Also on the datasheet, the UK unemployment rate was estimated at 4.4 per cent in the three months to May.

In April to June, the number of job vacancies in the UK decreased by 30,000 on the quarter to 889,000. “The total has now been falling for a full two years, though it remains above pre-pandemic levels,” said McKeown.