Wages rising sharply and faster than expected
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Wages are rising far faster than expected after a year of slowing, official figures show. Average pay rose sharply, by 5.2%, in the three months to October, according to data from the Office for National Statistics (ONS). A month earlier wages had been growing by 4.4% including bonuses and 4.9% excluding bonuses.
The increase comes as a surprise - economists polled by the Reuters news agency had forecast increases of 4.6% and 5%. Money blog: Highest UK student loan debts revealed. It follows more than a year of slowing rises and comes thanks to private sector pay rises, the ONS said.
Private sector pay grew by 5.4%, compared to 4.3% for the public sector. Good jobs news could be bad for mortgages. There was no change to the unemployment rate which remained at 4.3% as expected, the ONS also announced. The number of people on UK payrolls fell by 35,000 to 30.4 million between October and November, although this is subject to revision.
The ONS added that the number of vacancies fell by 31,000 to 818,000 in the three months to November. It's good news for workers seeking improved pay but may be bad news for people remortgaging in the new year. High wages had been a concern for interest rate-setters at the Bank of England who seek to bring down inflation, which rose to 2.3% in October.
Gora Suri, an economist at PwC UK, said the rise in earnings growth shows that inflation pressures remain in the economy. He said: "Despite the considerable disinflation we have seen in the UK economy over the last two years, these underlying inflationary pressures remain.
