Wage growth at highest rate since 2008

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Wage growth in the UK rose to 3.6% in the year to May 2019, the highest growth rate since 2008, according to Office for National Statistics figures.

Wages have been outpacing inflation since March 2018.

A record high of 32.75 million people were in employment up to the end of May, while 1.29 million were out of work, the lowest since at least 1992.

“The labour market continues to be strong,” said ONS deputy head of labour market statistics Matt Hughes.

“The number of self-employed part-timers has passed one and a half million for the first time, well over double what it was 25 years ago,” he added.

“Regular pay is growing at its fastest for nearly 11 years in cash terms, and its quickest for over three years after taking account of inflation.”

Adjusting for inflation, wages held steady compared with last month.

The unemployment rate remained at 3.8% as expected, its joint-lowest since the three months to January 1975.

But the growth in employment slowed to 28,000, the weakest increase since the three months to August last year. Vacancies fell to their lowest level in more than a year.

Some recent surveys of companies have suggested employers are becoming more cautious about hiring in the lead-up to the new Brexit deadline of 31 October.

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“Despite signs that employment growth is tailing off, the labour market remains tight, with the unemployment rate at a multi-decade low,” said Alpesh Paleja, principal economist of lobby group the CBI.

“It’s encouraging that pay growth has picked up further, putting more money in people’s pockets, but as recent data shows productivity remains in the doldrums.”

Ian Stewart, chief economist at Deloitte, said: “The jobs market seems to have defied gravity, with wages rising and unemployment falling even as growth has slowed.

“The big question is how long can that last. With job vacancies edging lower and firms more cautious on hiring, the pace of job creation could slow from here.”