MNI 5 THINGS: Anaemic Bonuses Weigh on UK Nominal Earnings

By Jai Lakhani and Jamie Satchithanantham

     LONDON (MNI) - The following are the key points from the UK labour market

data published Tuesday by the Office for National Statistics.

     - Nominal earnings growth slowed to an 11-month low of 2.4% in three months

to June, meaning we are still to see a definitive restoration of real incomes.

When discounting nominal earnings by CPI, income growth was flat in the second

quarter.

     - Weak bonus pay growth masked firm underlying wage growth. Excluding

bonuses, wages grew by 2.7% in the 3m to June and by 2.8% in the month of June -

the third best outturn in the past 15 months.

     - Bonuses were down 6.6% m/m in June, the weakest showing also in

11-months. According to an ONS official, this year many bonuses were paid out in

April and March, earlier than usual.

     - The labour market continues to tighten, with demand for workers at a

record high and the jobless rate ticking down to 4.0%. That said, the number of

people who found work rose by only 42,000 on the quarter while the number

classified as inactive edged higher - both of these, however, come off the back

of strong performances in recent months.

     - Productivity rose by 0.4% on the quarter, up from a 0.4% decline in Q1.

Measured as output per hour, the rise was attributed to a fall in hours worked

as opposed to a rise in output growth. Despite the rise, productivity remains

below pre-financial crisis rates.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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