Analysis

Good news on wages, but Hunt still faces ‘runaway train’ on pensions

A real-terms rise in earnings won’t be enough to persuade the Bank of England to halt interest rate rises, says Jim Moore — and the chancellor faces the alarming prospect of an 8% hike in state pensions

Tuesday 19 September 2023 17:53 BST
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<p>For the chancellor, Britain’s economic difficulties are far from over</p>

For the chancellor, Britain’s economic difficulties are far from over

Some good news for Britain’s hard-pressed workers, who have been watching the value of the pound in their pocket shrink at an unprecedented rate, is to be found in the latest labour market data from the Office for National Statistics.

Until now, pay has been rising rapidly – but not by enough to overcome inflation, which remains stubbornly high.

But it seems workers have finally caught up with soaring prices. The ONS data shows that annual growth in regular pay (excluding bonuses) between May and July came in at 7.8 per cent, representing a rise in real, inflation-adjusted terms, for the first time in more than a year. The official rate of inflation (for July) stands at 6.8 per cent.

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