Total earnings growth including bonuses rose by an annual 3.7% in the three months to June – the highest rate since June 2008 and up from 3.5% in May, and in line with forecasts in a Reuters poll of economists. «The jobs market remains a source of strength for the UK economy, though it may now be reaching its peak,» said Tej Parikh, chief economist at the Institute of Directors. Excluding bonuses, annual pay growth picked up to 3.9% from 3.6%, the ONS said, compared with the poll forecast for growth of 3.8%. A little of the strength in the pay data reflected the unusual timing of annual pay rises for public health workers in 2018, when a larger-than-normal increase was deferred until July.
Some details pointed to tougher times ahead, after data last week showed the economy unexpectedly shrank by 0.2% in the three months to June. Output per hour, the headline measure of productivity, fell 0.6% in annual terms – the fourth quarter of decline in a row and the longest such run since mid-2013. Poor productivity is one of Britain’s biggest economic challenges and, until recently, had contributed to a decade of weak pay growth.
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