Total pay increases by 2.3%

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Total pay, including bonuses, increased by 2.3% in Great Britain between March-May 2015 and March-May 2016, according to the Office for National Statistics (ONS).

The UK Labour Market: July 2016 report also found that regular pay, in nominal terms and excluding bonuses, grew by 2.2% between March-May 2015 and March-May 2016.

Average regular pay, excluding bonuses, for employees in Great Britain was £471 a week before tax and other deductions in May 2016, up from £461 a week in May 2015.

Average total pay, which includes bonuses, rose to £502 a week in May 2016 from £492 a week in May 2015.

In real terms, adjusted for consumer price inflation, regular pay increased by 1.8% between March-May 2015 and March-May 2016. Total pay increased by 1.9% in real terms over the same period.

Ben Brettell, senior economist at Hargreaves Lansdown, said: “Today’s unemployment and wage growth numbers from the ONS cover the three months to the end of May. As such they reflect pre-referendum conditions and can be taken with a large pinch of salt. Nevertheless, the signs are mildly encouraging, with unemployment falling to an 11-year low of 4.9% and wages growing by 2.3% year-on-year.

Brexit has added a significant amount of uncertainty, and it is perfectly possible that firms will delay hiring decisions until they have greater confidence. In a survey of more than 1,000 business leaders conducted by the Institute of Directors, a quarter of respondents said they would freeze recruitment and 5% said they expected to lay workers off.

“As such the current unemployment rate of 4.9% could be the lowest we see for a while, but if the forecast downturn in the labour market does materialise, at least we start from a position of relative strength.”

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Ben Willmott, head of public policy at the Chartered Institute of Personnel and Development (CIPD), added: “It is too early to say what effect the vote to leave the EU will have on employers’ recruitment and redundancy intentions over the next few months, but today’s figures at least provide some reassurance that the UK’s labour market is robust and had positive momentum before the referendum vote.

“Pay remains stable, with average weekly earnings increasing by 2.2% excluding bonuses, suggesting that a figure of about 2% is becoming the new normal.”