UK wage growth higher than expected as employment at record high
Wage growth beat market and economist expectations in the three months from February to April. Pay rose by 3.4% compared with a year ago. After taking inflation into account, wage growth was 1.4%, official figures show.
The unemployment rate remained at 3.8% and has not been lower since the October to December 1974 period, the Office for National Statistics said.
The employment rate for women was 72%, the highest on record. This is after changes to the state pension age leading to fewer women retiring between the ages of 60 and 65.
Matt Hughes, deputy head of labour market statistics at the ONS, said: “With employment growth among women coming from full-timers, the overall gap between men and women in hours worked is now the lowest ever – women now average about three-quarters of men’s weekly hours, compared with around two-thirds 25 years ago.”
Sterling rose from five-month lows against the euro after wages rose faster than expected, beating some economists predictions of a 3% rise.
While employment growth slowed, the jobless rate held at 3.8%.
John Hawksworth, PwC chief economist, said it was ‘interesting’ that female employment rose by 60,000 compared with the previous quarter, while male employment fell by 27,000.
“This is consistent with a longer-term trend towards a narrowing gender employment gap. Male employment is still higher at around 80%, but this is well below its historical highs of over 90% back in the 1970s.”
Tej Parikh, chief economist at the Institute of Directors, said: “The buoyant labour market is still going strong for the UK economy, even as it weathers widespread political uncertainty.”
“However, the employment boom cannot last forever, and is certainly showing signs of softening.”