17th December 2014
Wages are finally starting to increase at a faster rate than prices, giving consumers more spending power in the run-up to Christmas, official figures reveal.
From August to October, average earnings excluding bonuses were 1.6% higher than a year ago, while earnings including bonuses were up by 1.4%, according to the Office for National Statistics.
Yesterday the ONS revealed that consumer prices index inflation was at a 12-year low of 1% and experts have tipped that it will fall further in the coming months.
It is the first time in six years that both measures of wage growth have been higher than inflation.
The UK jobless rate remained static at 6% in October as the unemployment total fell at its slowest pace for a year, by 63,000 to 1.95 million.
Employment growth also slowed to reach 30.79 million though it still represented the highest total since records began in 1971 and was 588,000 up on a year ago.
Work and Pensions Secretary Iain Duncan Smith said: “These remarkable figures show that our long-term economic plan to create a better more prosperous future for Britain is working. Behind them are countless stories of individual hard work and determination, with more people than ever before feeling financially secure.
“What we can see at the end of 2014 is that our welfare reforms are ensuring that people have the skills and opportunities to move into work. Whether that’s work experience for young people to get their foot on the career ladder, the benefit cap encouraging people to get a job, or the Work Programme which is helping more people than any previous jobs scheme.
“These figures show that our long-term economic plan to create a better, more prosperous future for Britain is working – with thousands of people feeling more secure over the Christmas period with a regular wage.”
But TUC general secretary Frances O’Grady said: “Today’s figures show some long overdue improvements, but at this rate it will take over a decade to recover the real value of people’s earnings. And there is a very long way to go to deal with the problem of so many jobs being insecure, short hours, or on zero hour contracts.
“We need to make sure that nobody is left behind in the recovery, so today’s increase in long-term unemployment for young people is a growing concern.”