Total pay for employees in Great Britain, including bonuses, increased by 0.1% in real terms between April to June 2017 and April to June 2018, according to research by the Office for National Statistics (ONS).
Its UK labour market: August 2018 report also found that regular pay, excluding bonus payments, increased by 0.4% in real terms, having been adjusted for consumer price inflation, between April to June 2017 and April to June 2018.
In nominal terms, not having been adjusted for consumer price inflation, total pay increased by 2.4% between April to June 2017 and April to June 2018. This compares to a 2.5% recorded growth rate between March to May 2017 and March to May 2018.
Regular pay, in nominal terms, increased by 2.7% between April to June 2017 and April to June 2018. This is lower than the 2.8% growth rate recorded between March to May 2017 and March to May 2018.
Average total pay for employees in Great Britain, including bonuses, was £518 a week in nominal terms before tax and other deductions in June 2018. This compares to £507 a week in June 2017. Average regular pay, excluding bonuses, was £488 a week for British employees in June 2018, before tax and other deductions. This compares to £474 a week in June 2017.
In real terms, average total pay for employees in Great Britain was £489 a week in June 2018, before tax and other deductions from pay. Average regular pay in real terms, excluding bonus payments, was £461 a week in June 2018, before tax and other deductions from pay.
Average total pay for employees in Great Britain, in nominal terms, increased by 37.7% between January 2005 and June 2018, rising from £376 a week to £518 a week. Over the same time period, the Consumer Prices Index, including owner occupiers’ housing costs (CPIH), increased by 35.2%.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, added: “Strong jobs figures had been widely predicted, and falling unemployment and rising wages were a major part of the argument for the Bank of England raising interest rates in August. But while pay excluding bonuses rose at 2.7%, ahead of inflation, pay including bonuses was up just 2.4%. It puts wage growth after inflation at just 0.4% including bonuses and 0.1% without. Economists are predicting inflation figures at 2.5%, so we will have to wait and see whether wages including bonuses have fallen behind inflation again.
“Given that unemployment is so low and vacancies are at their highest level since comparable records began in April 2001, we would usually expect faster wage increases. However, higher employment doesn’t appear to be feeding so strikingly into higher wages at the moment.”