Total pay, including bonuses, increased by 0.2% in real terms in Great Britain between December 2015-February 2016 and December 2016-February 2017, according to research by the Office for National Statistics (ONS).
Its UK labour market: April 2017 report, also found that regular pay, excluding bonuses, increased by 0.1% in real terms between the three months to February 2016 and the three months to February 2017. This is the lowest annual growth rate since July-September 2014, which fell by 0.2% year on year.
In nominal terms, which have not been adjusted for consumer price inflation, total pay increased by 2.3% between December 2015-February 2016 and December 2016-February 2017. This is the same growth rate as between the three months to January 2016 and the three months to January 2017.
Regular pay in nominal terms increased by 2.2%, compared to 2.4% between the three months to January 2016 and the three months to January 2017.
Average total pay, including bonuses, for employees in Great Britain was £509 a week before tax and other deductions from pay in February 2017, compared to £494 a week in February 2016. Average regular pay, excluding bonuses, was £478 a week in February 2017, which is an increase from the £469 a week recorded in February 2016.
Average total pay for employees in Great Britain, in nominal terms, increased by 34% between January 2005 and February 2017, rising from £380 a week to £509 a week. Over the same time period, the Consumer Price Index, including owner occupiers’ housing costs (CPIH), increased by 30.8%.
Gerwyn Davies, labour market analyst at the Chartered Institute for Personnel and Development (CIPD), said: “The latest jobs data suggests that employment and wage growth are running out of steam. Year-on-year living standards fell in February for the first time since 2014, due to the slower earnings growth and rising inflation we’ve seen during the past six months. It seems highly likely that the annual rate of wage growth will fall in the coming months with inflation predicted to continue to rise during 2017.
“This is perhaps no surprise given the UK’s ongoing productivity crisis, which limits the ability of employers to increase pay. At the same time, low pay growth may also be a sign that employers are seeking to offset the impact of increasing labour costs, such as last week’s apprenticeship levy and the latest national living wage increase.”