News | Published February 18 2020

Wages "finally" return to pre-financial crisis levels

According to ONS figures, the average weekly wage in the UK has now risen above the rate of March 2008, the highest level reached before the financial crisis.

In the three months leading up to December, weekly pay reached £512, the highest rate for 12 years when adjusting for inflation.

Over the three month period, earnings grew at an annual rate of 3.2 per cent and employment rose by 336,000, a one per cent increase, to set a new record high. 

Over the same period, unemployment reduced by 73,000, or 5.4 per cent, to now stand at 1.29 million.

While the employment market may have grown, GDP remained flat with no growth as an improved performance in the construction and services sector was offset by a fall in production. 

According to the Bank of England’s Monetary Policy Report for January 2020, this lack of growth was caused by “Brexit-related uncertainties and weak global growth.”

According to the ONS however, this uncertainty is diminishing with the body referencing a IHS Markit and CIPS UK report which found an increase in positive business expectations after the December election.

Digging deeper into the employment statistics, the women’s labour market continues to perform strongly. 

Across the three month period studied, the number of women in employment increased by 150,000 to a record high of 15.16 million. While the number of men in employment increased, the rate was slower. 

The surge in the employment market has therefore mostly been driven by women, with the number of women in employment increasing from 1.26 million in 2012 to 13.80 million in 2019.

While the release of these new figures will be welcomed by workers across the UK, the announcement was tempered with some critique. 

The Resolution Foundation, which aims to improve the standard of life for low- and middle-income families, calculated that if pre-crisis trends for increase in pay had continued, the average age would now be £141 a week higher.

Similarly, the Joseph Rowntree Foundation found that while employment had increased, so too had in-work poverty.

Commenting on these figures, Myrto Miltiadou, deputy head of labour market statistics at the ONS, said: "In real terms, regular earnings have finally risen above the level seen in early 2008, but pay including bonuses is still below its pre-downturn peak.

"Employment has continued its upward trend, with the rate nudging up to another record high. In particular, the number of women working full-time grew strongly over the past year."

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Authored by

George Salmon
Political Editor
February 18 2020

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