Growth in average total pay, including bonuses and regular pay but excluding bonuses, from September to November 2022 was 6.4%, according to the latest Office for National Statistics (ONS) figures.
This was the strongest growth rate seen since before the Covid-19 (Coronavirus) pandemic.
In September to November 2022, adjusted for inflation growth in real terms, both total and regular pay fell by 2.6% compared to the same period in the previous year, which was slightly less than the 3% fall in real regular pay seen in April to June 2022.
Average regular pay growth for the private sector for the same period was 7.2%, the largest growth rate seen for the private sector, and 3.3% for the public sector. The finance and business services sector had the largest regular growth rate at 7.6%, followed by the construction sector at 6.3%.
According to the ONS, early estimates for December 2022 indicated that median monthly pay was £2,194, an increase of 7.7% compared with the same period in the previous year.
For the three months ending November 2022, the highest employment rate estimate in the UK was in the South West at 79.3% and the lowest was in Northern Ireland at 71.3%. Scotland had a record high employment rate of 76.1%. Meanwhile, the highest unemployment rate estimate was in the North East at 4.7% and the lowest was in the South West at 2.1%.
Jonathan Boys, labour market economist for the Chartered Institute of Personnel and Development (CIPD), said: “Demand for staff is high, but there is a shortage of available people as unemployment remains low and the workforce is smaller than it was pre-pandemic. Annual pay growth of 6.4% would usually be reported as phenomenal, but with prices rising by 10.7%, this still represents a real-terms pay cut, plunging the cost-of-living crisis to new depths.
“Many people have dropped out of work entirely and employers need to do more to entice them back. A focus on job quality, including flexible working in all its guises, will facilitate the inclusion of people who may have left employment because they could not make it work for them.”
Joanne Frew, global head of employment and pensions at DWF, added: “Reports are showing that pay is rising at a significant pace but that this is still not enough to counteract the cost-of-living crisis. However, soaring prices mean that employees are not feeling the benefit of pay increases.
“Employers are in the precarious position of juggling demands for increased pay, a competitive labour market and rising business costs. In November 2022 the UK economy unexpectedly grew by 0.1%, reportedly boosted by increased revenue from the World Cup. Although the growth offers some comfort, the labour market is likely to face a continued turbulent period over the next few months.”