LONDON – Pay growth in Britain is finally picking up, with wages rising 2.9 per cent in the three months to July compared with a year earlier — the strongest increase since February 2009.
The Office of National Statistics reported Wednesday that pay including bonuses also rose by 2.9 per cent. The increase in pay has long been the missing piece in Britain’s economic recovery and may pressure the Bank of England to raise interest rates despite low inflation.
Markit chief economist Chris Williamson says the bank “will remain ultra-cautious about tightening policy, but the upturn in pay growth certainly suggests that a first rate hike by the end of the year remains a distinct possibility.”
The unemployment rate was 5.5 per cent, unchanged from three months earlier.