UK regular pay growth slows for the first time since January

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Growth in British workers' regular pay — which is being watched closely by the Bank of England — slowed from a previous record high and job vacancies also dropped, official figures showed in a sign that the labour market is losing momentum.

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17 Oct 2023

British average earnings, excluding bonuses, were 7.8% higher than a year earlier during the three months to the end of August, down from an upwardly revised 7.9% in the three months to July, the first such fall since January.

Average earnings are being monitored by the Bank of England as it considers whether to resume raising interest rates to counter the risks from still high inflation.

The latest reading was in line with expectations from economists polled by Reuters, but sterling fell slightly against the U.S. dollar after the data.

Total pay — a more volatile measure which includes one-off bonuses — was 8.1% higher in the three months to August than a year earlier.

However, with consumer price inflation of 6.7% in August, the real-terms increase in pay was far smaller.

Regular pay, adjusted for CPI