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| File photo: A worker is seen completing final checks on the production line at Nissan car plant in Sunderland, northern England |
British households enjoyed faster wage growth in the year to April but, when adjusted for inflation, earnings are still below their levels before the financial crisis a decade ago, an annual survey showed on Thursday.
Median full-time weekly earnings increased 3.5 per cent in the year to April 2018, the strongest growth in nominal terms for 10 years, the Office for National Statistics said in its Annual Survey of Hours and Earnings.
Bank of England Chief Economist Andy Haldane said this month there were finally signs of a โnew dawnโ for pay increases as the steep fall in unemployment prompts many employers to offer more to keep and hire staff.
The BoE believes rising wages will create inflationary pressure and require further, gradual increases in interest rates, even as Britainโs economy grows only slowly.
But Thursdayโs figures looked less positive when taking into account the rise in inflation.
Real-terms median earnings rose by 1.2 per cent in the 12 months to April 2018, the ONS said. Although that was a rebound from the 0.5 per cent drop seen last year, growth was faster in 2016 and 2015.
โThis mixed picture comes off the back of a disastrous decade for pay,โ said Stephen Clarke, senior economic analyst at the Resolution Foundation, a think-tank that focuses on living standards.
The ONS said earnings adjusted for inflation remained 3.7 per cent lower than in 2008, before the financial crisis.
โWorryingly, todayโs figures also show the first growth in pay inequality since 2010,โ Taylor said.
This was caused by a drop in hours worked by the lowest paid, offsetting a rise in the minimum wage, and coupled with an increase in wages for the highest earners.
Earlier on Thursday a survey from wage data firm XpertHR showed British companies have no plans to step up the pay awards they offer staff over the coming year, posing a challenge to BoEโs forecasts of faster pay growth.
The BoE is due to publish new forecasts along with its interest rate decision on Nov. 1.
