Total pay for employees in the UK, including bonuses, increased by 1.4% in real terms for the periods March 2018 to May 2018 and March 2019 to May 2019, according to research by the Office for National Statistics (ONS).
The Average weekly earnings in Great Britain: July 2019 report also found that regular pay, excluding bonus payments, increased by 1.7% in real terms, which have been adjusted for consumer price inflation, between March 2018 to May 2018 and March 2019 to May 2019.
The annual growth in average weekly earnings for UK-based employees has improved by 3.4% for total pay, inclusive of bonus payments, compared to a 3.6% growth rate for regular pay, which does not take into account bonus awards. Furthermore, annual growth in both total and regular pay has risen by 0.2% in March 2019 to May 2019 compared to February 2019 to April 2019.
Average regular pay for employees in Great Britain, before tax and other deductions from pay, was £503 a week in nominal terms in May 2019. In real terms, UK employees received average regular pay of £468 a week for May 2019, compared to £460 a year earlier. Total pay for employees in Great Britain was £498 a week in May 2019, before tax and other deductions from pay.
Gerwyn Davies, senior labour market analyst at the Chartered Institute for Personnel and Development (CIPD), said: “Pay growth has received a further modest boost. However, employers with low levels of productivity will face a hit to profits if they raise pay without seeking to improve productivity growth. The solution to this problem partly lies in improving management practices.”
Between March 2018 to May 2018 and March 2019 to May 2019, annual total pay within the public sector grew by 3.6% and is at its highest growth rate since June 2010.
Average total pay growth, including bonuses, for employees working within the construction sector between March 2018 to May 2018 and March 2019 to May 2019 is estimated at 5.2%. This compares to a 0.8% total pay growth rate in the wholesale, retail, hotels and restaurants industry; regular pay growth for this sector is 2.6%.
The ONS has attributed these increases in pay to new national living wage and national minimum wage rates, set in April 2019, which are 4.9% higher than the 2018 rate. It also believes that NHS pay rises have impacted public sector pay growth.
Ruth Buchanan, employment partner at law firm Ashurst, added: “The latest UK labour market report shows higher employment rates and [wage] growth, which must be welcomed, but these may just be the calm before the Brexit storm. It is questionable whether this is sustainable with so much potential economic uncertainty around the corner and employers and employees should view the report with cautious optimism.”
