UK wage growth increased at the highest rate since 2008 in the three months to September 2018, according to data from the Office for National Statistics (ONS).
Excluding bonuses, average weekly earnings grew by 3.2% in Q3 2018 compared with the same period in 2017. The ONS says this has not been higher since October to December 2008.
Adjusted for price inflation, this was an increase of 0.9%, which remains below the pre-2008 crisis level.
The number of people in employment also grew, with 32.41 million people in work – 23,000 more compared with April to June 2018, and 350,000 more than for a year earlier.
However, job vacancies have continued to rise, with an additional 44,000 vacancies open from August to October 2018 compared to 2017.
Tej Parikh, senior economist at the Institute of Directors, said that while the figures are a positive sign for households and retailers, there is a “big question mark” over how long it will last.
“We’re unlikely to be entering a ‘new dawn’ for persistent wage growth just yet, as firms are facing ongoing struggles investing in their productivity.
“Business leaders are also finding it more and more difficult to fill openings as the pool of available talent shrinks.
“So, while today’s data may be a boon as Brexit negotiations enter the zero hour, it shouldn’t mask longer-term challenges in driving sustained growth in salaries and alleviating skills shortages.”
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