Unemployment rises to near two-year high as wages continue to soar at record pace

The Office for National Statistics said total pay including bonuses jumped by 8.5 per cent

The rate of unemployment has lifted to its highest level for nearly two years (PA) (PA Archive)

Unemployment rates have risen to their highest level for nearly two years as wages continue to surge at a record pace.

Earnings have not been outstripped by inflation for the first time in nearly two years, according to official figures.

The Office for National Statistics (ONS) said average regular weekly earnings growth remained at a record high of 7.8 per cent in the three months to July, matching Consumer Prices Index (CPI) inflation for the first time since October 2021.

Total pay including bonuses jumped by 8.5 per cent, meaning that it exceeded inflation for the first time since March 2022, up 0.6 per cent with CPI taken into account.

The figures also showed that the rate of unemployment lifted to its highest level for nearly two years, at 4.3 per cent in the three months to July, up from 4.2 per cent in the previous three months.

Darren Morgan, ONS director of economic statistics, said: “Earnings in cash terms continue to increase, at a record rate outside the pandemic-affected period.

“Coupled with lower inflation, this means people’s real pay is no longer falling.

“Unemployment continues to increase in the latest three months. Correspondingly, employment is down, driven by falls among men and the self-employed.

“The proportion of people neither working or looking for a job is slightly up, with more students, as well as the long-term sick reaching yet another record.”