Is Britain getting a pay rise?

Whisper it, but British workers seem to be getting a pay rise. This morning’s update from the Office for National Statistics reveals that average regular pay (which excludes bonuses) was up by 7.8 per cent between May and July this year, unchanged from the last three-month period. Wage growth has stayed a percentage point above headline inflation – at 6.8 per cent on the year in July – which suggests a relatively small, but meaningful real-terms pay raise.

So after more than a year of real-terms pay cuts – as average wage hikes kept falling behind inflation – some workers may finally be feeling the slightest bit of relief as their purchasing power rises once again. But not everyone will be pleased. Today’s figures will weigh heavily on the Bank of England, which is mulling over another rate rise later this month. The next inflation update, out next week, will help guide the Bank’s decision-making – but so will today’s labour market update.