The highest pay growth for more than a decade has put household finances in their best shape since 2016, official figures showed today.
The Office for National Statistics’ latest labour market figures showed pay growth of 3.3% in the quarter to October, the best since June 2008.
Adjusting for inflation, real-terms pay is rising at 1%, the highest since December 2016, before the pound’s post-referendum slump bit into incomes. In October alone, pay was 3.5% ahead of a year earlier.
While rising pay will concern the Bank of England’s rate-setters, it will encourage retailers hoping for a Christmas boost on the High Street.
Pantheon Macroeconomics’ Samuel Tombs said the wage pick-up “strengthens the case” for a Bank rate rise when the threat of a no-deal Brexit fades.
Capital Economics’ Ruth Gregory added: “Overall… we remain confident that provided a Brexit deal is secured, a further rise in real earnings will spur a recovery in consumer spending growth next year.”