Wages grow at their fastest rate since 2008 as employment rate hits joint record high

UK wages grew at their fastest pace in a decade in the final three months of last year.

Wages grew 3.4 per cent for October to December last year, according to the Office for National Statistics, up from 3.3 per cent growth to November, as vacancies reached a new record high.

The employment rate 75.8 per cent – higher than the 75.2 per cent recorded a year earlier – the joint highest since records began in 1971, with 32.6m people in work.

The unemployment rate remained at four per cent – it has not been lower since December 1974.

ONS senior statistician Matt Hughes said: "The labour market remains robust, with the employment rate remaining at a record high and vacancies reaching a new record level.

"The unemployment rate has also fallen, and for women has dropped below 4 per cent for the first time ever."

Average weekly earnings in the UK surged 3.4 per cent to December, giving households even more of a boost as inflation continues to fall.

The number of UK workers rose by 167,000 compared with the previous three months, while the number of unemployed people fell by 14,000.

"The labour market is a bulwark for the UK economy just as it enters a testing period," Institute of Directors senior economist Tej Parikh said.

"Businesses have shown resilience in the face of uncertainty by opening new positions and hiring at a rapid pace. The jobs boom in turn has provided uplift to the economy, bringing more people into work and helping support household incomes.

“With wages now rising above inflation, workers will feel their pay packets going even further, which should give some reprieve for embattled retailers down the line," he added.

Employment minister Alok Sharma said the figures showed the "underlying resilience" of the UK jobs market even amid global economic challenges.

But EY Item Club economist Howard Archer said it "remains to be seen" whether the labour market can retain its strength in the coming months amid Brexit uncertainty.

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