MNI 5 THINGS: UK Wage Growth Above 3%, Outpace Expectations

By Jamie Satchi, Laurie Laird and Jai Lakhani

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

data for the three months to August, published Tuesday.

     - Economic officials are likely to breathe a sigh of relief, as regular

wages rose by an annual pace of 3.1%, the joint-fastest pace since the fourth

quarter of 2008. However, wages rose by a more moderate 0.7% when discounted for

inflation, but still the fastest pace since the fourth quarter of 2016.

     - However, employment fell by 5,000, the first decline since the three

months to October 2017. Inactivity rose sharply for the second straight

three-month period, jumping by 103,000 in the three months to August.

     - While the upturn in wages was broad-based, the services sector did the

bulk of the heavy lifting. Core wages grew by 3.1% in the 3m to August, a

three-year high. Services accounts for 83.3% of the labour market.

     - This was joined by a continued strengthening of public sector pay growth,

previously highlighted by MNI. Regular warnings grew at the joint-fastest pace

since April 2011, boosted by a slew of pay settlements in recent months and the

break of the 1% pay cap.

     - The claimant count rose for the fourth straight month to 18,500 in

September, suggesting underlying slack in the labour market. Unusually, the Bank

of England cited the data, adjusted in-house for the effects of Universal

Credit, in the September MPC minutes despite the statistic being demoted to

'experimental' status in June 2015.

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

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