UK wage growth picks up in January but fails to keep pace with inflation
UK wage growth picked up in January as job vacancies hit a new record high, but pay failed to keep pace with the highest inflation rate for three decades.
The Office for National Statistics said the annual growth rate for average total pay, including bonuses, increased to 4.3% in the three months to December, up from a rate of 4.2% in the three months to November.
The rate was boosted by bonus payments in December, with the strongest pay growth for workers in finance, insurance and the property industry. Regular wage growth excluding bonuses dropped by 0.1 percentage points to 3.7% over the same period.
The performance beat the expectations of City economists for total wage growth of 3.8% and a rise of 3.6% for regular pay.
However, taking into account inflation – which is at the highest level since the early 1990s amid a dramatic increase in household energy costs and wider cost of living crisis – real pay fell on the year by 0.1%. Wages excluding bonuses fell by 0.8%.
Sam Beckett, head of economic statistics at the ONS, said: “After taking account of recent rises in consumer prices, real total pay fell in the year to October-December 2021, despite a strong recovery in bonuses.”
It came as the number of job vacancies across the UK increased in January to a fresh record high of almost 1.3 million after two consecutive monthly falls when some employers paused their hiring plans amid increased uncertainty over the economic outlook due to Omicron.
In a sign of rising confidence among firms, the number of employees on UK company payrolls increased by 108,000 in January to a record 29.5 million. The unemployment rate for the three months to December fell by 0.2 percentage points to 4.1%, although remains 0.1 percentage points higher
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