UK wage growth falls to two-year low
Surprisingly, unemployment fell 4.2% in July when economists had expected a rise
Wages excluding bonuses in the UK grew by 5.4% in the three months ended 30 June 2024, the lowest growth for two years, according to data from the Office for National Statistics (ONS).
Furthermore, when price rises, measured by inflation, are factored in wages only grew by 3.2%.
Alongside this, public sector pay growth was 6%, while private sector wages were up 5.2%.
Surprisingly, unemployment fell from 4.4% to 4.2% in July when economists had expected a rise.
A poll of economists from Reuters found that most expected a rise to 4.5%, up from the 4.4% recorded a month ago.
Matthew Percival, CBI Future of Work and Skills director, said: “Economic inactivity remains stubbornly high, particularly regarding the 2.8 million long-term sick. Ill health affects lives and stunts growth so there is an indisputable case for business and Government to work together to improve the health of people in work. Employers can play a more proactive role in the health of their workforce, but the tax system discourages it.
“At the Autumn Budget, the Government can make a difference through action on employee health tax incentives. Making Employee Assistance Programmes fully tax-free would complement the Government’s Back to Work plan by preventing people from becoming economically inactive in the first place. Today’s CBI analysis suggests that every £1 on this measure would generate £10 for the economy.”
