UK wages are rising at their fastest level for nearly a decade and record numbers of people have a job, Office for National Statistics (ONS) figures show.
According to the ONS, average weekly earnings increased by 3.3% in the year to October, up from 3.1% the previous month. The figure is now the same including and excluding bonuses.
This is the highest figure since 2008 and well above the current inflation rate of 2.4%. It is also an improvement on last month, which saw wages growing at 3.2%.
The level of employment increased by 79,000 in the three months to October to 32.5 million – the highest since records began in 1971.
Unemployment increased by 20,000 to 1.38 million, although this is still lower than the same point last year.
The overall unemployment rate remains unchanged at 4.1%.
The reason that employment and unemployment both rose is because of the UK’s rising population. Fewer people are classed as inactive, such as students, people on long-term sick leave and those that have given up looking for a job.
The number of people economically inactive fell by 95,000 to 8.66 million.
ONS senior statistician Matt Hughes says: “The employment rate has continued to rise in the most recent three months, returning to a joint record high, boosted by an increase in full-time workers.”
“There was a corresponding fall in the inactivity rate, while the unemployment rate was virtually unchanged.”
He adds: “Real earnings are now growing faster than at any time since around the end of 2016.”
Howard Archer, chief economic adviser to the EY ITEM Club, says: “There is certainly survey evidence that labour market tightness is pushing up starting salaries, and pay for people switching jobs. However, employers currently appear to be offering only modest pay increases for their existing staff.”
He adds: “Current decent employment may be influenced by companies being keen to employ while they can, given the increased concern in some sectors over a lack of suitably skilled candidates – in some cases this has been significantly influenced by fewer workers coming from the EU.”
There were an estimated 848,000 job vacancies in the three months to November – up 10,000 from the previous quarter – suggesting companies remain keen to employ.
Minister of state for employment Alok Sharma says: “Today’s statistics show the enduring strength of our jobs market, with wages outpacing inflation for the ninth month in a row and employment at a record high.
“This is benefiting people across the country, with almost 400,000 more people in work in the last year. Putting more money in the pockets of working families, and showing that the UK remains a great place to invest and do business.”
This article was originally written by our sister publication Moneywise.