UK pay growth leaps to 5.2%, reducing chances of interest rate cut
Share:
Rise in wages for skilled workers in manufacturing sector drives increase, but vacancies fall again. UK pay growth accelerated to 5.2% in October, putting pressure on the Bank of England to resist calls for lower interest rates when policymakers meet later this week.
The Office for National Statistics (ONS) said annual growth in employees’ average earnings jumped after a significant rise in wages paid for skilled workers in the manufacturing sector. Wages rose 4.4% including bonuses and 4.9% excluding bonuses in the three months to September, but both hit 5.2% in the three months to October.
The rise in pay for factory workers to 6% meant the split between civil servants and private sector employees widened. Annual average regular earnings growth was 5.4% for the private sector and 4.3% for the public sector, the ONS said. The ONS director of economic statistics, Liz McKeown, said: “After slowing steadily for over a year, growth in pay excluding bonuses increased slightly in the latest period, driven by stronger growth in private sector pay.
“Pay growth including bonuses increased by more, but this reflects previous figures being affected by the one-off payments made to some public sector employees in 2023.”. Monica George Michail, an economist at the National Institute of Economic and Social Research, said the combination of high average pay growth and low inflation meant most workers were enjoying significant real income gains.
