Wages rises gather pace

INCREASES in pay packets have picked up, boosted in part by bonuses for estate agents. Regular pay for UK workers rose by 4.4% in the year to November 2004, unchanged from October, according to figures released today by the Office of National Statistics.

Including bonuses, average earnings rose by 4.2% in the year to November, up from 4.1% in October.

Officials said the increase was due to changes in the timing of some bonus payments in 'real estate, renting and business services'.

Salary rises in the private sector were 4.3%, behind 4.8% for the public sector. Lower paid state employees have been gaining on the private sector for several years, thanks in part to recruitment drives by various public bodies, such as the NHS, Britain's biggest employer.

It was also shown that workers are having to put in more hours for their money. Total hours worked per week increased by 11.6m hours to 914.2m hours, the highest figure since comparable records began in 1971. Officials said the increase reflected both more people in employment and an increase in the average number of hours worked, particularly for women.

The ONS also said the UK unemployment rate held steady at 4.7% in the three months to December.

However, the numbers masked a rising trend. The number of unemployed people increased by 13,000, to reach 1.4m, as measured by the International Labour Orgainsation.

The number of people claiming unemployment benefit fell by 6,200 in December to 826,300, the lowest number since July 1975. The claimaint count measure has been replaced by the ILO figures as the globally recognised way of measuring unemployment.

Analysts said the mild rise in the ILO figure, coupled with the larger than expected fall in claimant count, suggested that the Bank of England could afford to be patient about further interest rate moves. Most economists expect the UK base rate to fall later in 2005. If unemployment rose suddenly, the Bank may be forced to cut rates more quickly than expected to bolster the economy.

However, some experts beleive the next move may still be up. 'It would be quite remarkable if the authorities were to ease against a backdrop of such strong gains in employment and a new low in the claimant count,' said Simon Rubinsohn, chief economist at broker Gerrard.

The UK jobless figure fares well compared with 5.4% in the US, 9.9% in France, 10.8% in Germany and 8.9% in the euro area. Of the G8 group of the world's largest economies, only Japan has fewer people signing on, with a rate of 4.5%.