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전망·동향
Strong Wage Growth Persists Amidst Rise in National Minimum Wage
NIESR
2024.06.12
Growth in average weekly earnings (including bonuses) remains strong, recording 5.9 per cent in the three months to April 2024, and 6.0 per cent excluding bonuses.
With inflation falling, these figures represent a 2.2 per cent increase in real pay, the highest level since October 2021.
Amidst the 9.8 per cent minimum wage hike in April and better than expected economic recovery, total wage growth is expected to remain strong at 4.5 per cent in the second quarter of 2024. However, we expect pay growth to gradually slow as the labour market cools in the following months.
The persistence of high wage growth raises concerns about stickier inflation and prompts the Bank of England to remain cautious with regards to interest rate cuts.
Unemployment rate has risen by 0.4 pp on the quarter, recording 4.4 per cent in the three months to April, the highest level in three years.
The vacancy-to-unemployment ratio remains on a downward trend, amidst a rise in unemployment and a gradual fall in labour demand, indicating that the labour market continues to cool.