Pay for Britain’s workers is rising at the fastest pace for more than six years, even before George Osborne’s national living wage is implemented, in a sign that living standards are continuing to rise.
Official figures showed that average pay across the economy increased by 2.9%, when comparing May to July with the same period a year earlier. The growth rate was the same once bonuses were taken into account.
The Office for National Statistics said that was the fastest pace of wage growth since the three months to January 2009 – and with inflation running at 0.1% in July, that suggests the long-running squeeze on living standards has come to an end.
City analysts said the pay data suggested consumer demand, a key driver of economic growth, would be underpinned by the rise in real wages.
Howard Archer, of consultancy IHS Global Insight, said: “July’s marked strengthening in earnings growth coupled with consumer price inflation dipping to 0.0% in August is very good news for consumers’ purchasing power.”
