MNI BRIEF: UK Earnings Growth Slows; But Near Record Highs

Total earnings growth decelerated slightly in the three months to July, rising by a slightly better-than-forecast 8.3% but slowing from the record-high 8.8% seen in the second quarter, the UK's stats office said Tuesday. A 42.9% surge in bonuses in the three months to July -- also a record high -- elevated pay as depressed payments in 2020 made for easy upward comparisons. However, an ONS official noted that incentives to lure workers to sectors with high vacancy rates may also have lifted bonuses.

Single month growth in bonuses decelerated to a 35.4% annual rate in July from 48.5% in June. Excluding bonuses, regular pay decelerated to an annual rate of 6.8% from a record high of 7.3% in the second quarter.

The ONS has attempted to control for benchmark and compositional effects in earnings growth, estimating total underlying earnings to sit in a range of 5.1% to 6.6%, while regular underlying earnings are likely to be between 2.6% and 5.1%. Real total earnings decelerated to an annual rate of 6.8% from 7.3% in the second quarter, while real regular earnings growth fell to 4.5% from 5.2%.