Bad news, Governor: the wage-rise spiral is already raging

I’ve had the opportunity recently to take part in wage-rise discussions for several small entities in which I’m involved. The conversation has been much the same everywhere. ‘How about we offer them 3 per cent?’ ‘But that’s less than current inflation and they didn’t have a rise when they were on furlough last year.’ ‘So how about 5 per cent?’ ‘Safer to say 7, but they’d still be worse off than before the pandemic. And they’ll get 10 per cent or better if they move anywhere else.’

All of which was perfectly confirmed by official figures this week: annual pay settlements running at 3.7 per cent but (because so many people having been moving jobs for better wages) average pay up by 6.3 per cent in a year and by more than 10 per cent since February 2020. Meanwhile, unemployment is down to 4.1 per cent in an exceptionally tight labour market.