A significant number of workers will see an improvement in their standard of living as a result of the 1.6% increase in salary that is adjusted for inflation.
Despite the fact that official numbers revealed that unemployment declined and pay growth slowed to its lowest level in two years, the United Kingdom’s labour market defied predictions of a further contraction in the month of June.
The Office for National Statistics (ONS) reported that the unemployment rate unexpectedly decreased to 4.2% from 4.4% in the three months leading up to June from the previous three months after the previous three months.
On the other hand, salary growth, excluding bonuses, was 5.4% year on year over the three months leading up to June. This represents the smallest increase since the period leading up to July 2022, when it was 5.2%. The preceding three months saw wage growth of 5.7%.
Taking into account the effects of inflation, earnings increased by 1.6%, which indicates that a significant number of workers will continue to see an improvement in their standard of living.
Rachel Reeves, the chancellor, stated that “today’s figures show there is more to do with supporting people into employment because if you are able to work, you should take advantage of the opportunity to work.”
“This will be a component of my budget later in the year, and I will be making challenging decisions regarding spending, welfare, and taxation in order to repair the foundations of our economy so that we can rebuild Britain and make every part of our country better off.”
The 30th of October is the day that Reeves will present her first budget.
When compared to other industries, the financial and business services industry experienced a 6.2% annual increase in wages, which was higher than wages in other sectors.
“The construction sector saw the smallest annual regular pay growth across sectors, at 3.5%,” the Office of National Statistics (ONS) stated. With a total pay increase of 6.7% from April to June 2024, the manufacturing sector experienced the highest annual total pay growth.