UK unemployment sticks at its lowest level in six years as wage growth accelerates to 1.6 per cent
Is this a Christmas miracle? After six years of decidedly lacklustre wage growth, the Office for National Statistics' final labour report of the year has shown wage growth is finally beginning to pick up some speed.
According to the figures, published this morning, growth in wages excluding bonuses hit 1.6 per cent in the quarter to the end of October, compared with the year before. That's up from 1.2 per cent in the previous month, and well above inflation, which currently stands at one per cent.
Including bonuses, wage growth was at 1.4 per cent, although that's still a rise of 0.4 percentage points.
Meanwhile, unemployment stayed flat at six per cent in the three months to October, its lowest level in six years, with the number of unemployed people falling 63,000 to 1.96m during the quarter – although that six per cent level was slightly above economists' expectations of 5.9 per cent.
The number of people in employment rose to 73 per cent, or 30.8m people, 115,000 more than during the previous quarter, while those claiming Jobseeker's Allowance fell by just under 7,000 to 900,100.
James Knightley, a senior global economist at Ing, said the figures suggested the UK will end the year "in pretty good shape"
Next month we should see an even bigger increase since it will include November’s three per cent hike in the national minimum wage, which the Low Pay Commission believes benefitted one million workers. With inflation running at just one per cent and set to fall further, we are soon going to be seeing quite a pick-up in real take home pay.
With consumer confidence back at pre-crisis levels, this should be very good news for consumer spending, thereby allowing the UK to be a relative outperformer in terms of GDP growth in 2015 given increasing global economic and political concerns.