The pay figure reported by the Office for National Statistics (ONS) is an improvement on the 3.2% increase recorded a month ago and the best since the last quarter of 2008.

It also meant that in real terms – that is, stripping out the impact of inflation – earnings were now growing faster than at any time since around the end of 2016, the ONS said.

But the number of people classified as unemployed rose too, adding 20,000 to 1.38 million – the second month in a row that an increase has been recorded. The unemployment rate remained unchanged at 4.1%.

Meanwhile, the number of people in work rose by a greater than expected 79,000 to 32.48 million.

The figures helped cement gains for the pound after it sunk to a 20-month low on Monday following Theresa May’s decision to pull a Commons vote on her Brexit deal.

Sterling was trading more than half a cent higher against the US dollar above $1.26 following the publication of the ONS data.

Wage growth has been struggling to keep pace with the rise in the cost of living for much of the last decade but has improved in recent months – though it remains slower than the typical 4% seen before the financial crisis.

The latest figures showed real terms pay – the gap between pay growth and inflation – at 1%, the largest since the end of 2016.

The Consumer Price Index (CPI) measure of inflation was running at 2.4% in October.

Employment minister Alok Sharma said: “Today’s statistics show the enduring strength of our jobs market, with wages outpacing inflation for the ninth month in a row and employment at a record high.”

But TUC general secretary Frances O’Grady said: “The rise in pay growth is little consolation for workers in the middle of the longest pay squeeze in 200 years, with real wages expected only to get back to pre-crisis level in 2024.”

Tej Parikh, senior economist at the Institute of Directors, said: “The robust labour market continues to be an anchor for the British economy in a period of turbulence, but there is little room for complacency.”

Source: Read Full Article