UK wages grow at 2.9% - their fastest pace in six years

Wages are up 2.9 per cent up on last year in the quarter to July

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The Independent Online

The case for a rise in interest rates got a boost with employment figures that have shown that UK wages are growing at the fastest pace for six years.

The Office for National Statistics said wages, excluding bonuses, were 2.9 per cent up on last year in the quarter to July - the biggest rise since January 2009.

The pound rose as stronger jobs figures also showed a 42,000 rise in people in work 31.09 million, despite a 10,000 rise in unemployment to 1.82 million.

The figures - combined with zero inflation - are good for consumer spending but the UK economy has endured a tricky summer. Construction and manufacturing output disappointed in July, while the goods trade deficit soared.

Economists are also braced for a slowdown in the pace of growth in the current quarter from the 0.7 per cent seen between April and June. Bleaker news on jobs also looms with Redcar steelworks on Teeside close to administration, threatening 3,000 jobs.

IHS Global Insight’s Howard Archer said: “The Bank of England could yet lift interest rates from 0.50% to 0.75% as soon as the first quarter of 2016.”

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