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MNI BRIEF: UK Real Incomes Declined At Record Pace In May

(MNI) London

Real wages in the UK fell again in May, as pay deals and bonus payments failed to keep pace with soaring inflation, data released by the Office for National statistics showed, dipping even very slightly below analysts' expectations..

Total average earnings rose 6.2% y/y in the three months to May, driven in large part by bonus payments, while pay deals excluding bonuses rose by 4.3% y/y. However, when adjusted for inflation, real wages fell 0.9% y/y and by 2.9% excluding bonuses. Excluding bonuses, "real pay is now dropping faster than at any time since records began in 2001,” according to David Freeman, head of labour market and household statistics at the ONS said.

The jobs and wages data remains key to the Bank of England's reading of the UK economy and the latest data will offer mixed signals, but probably doesn't add further fuel to the need for a 50 bps rate hike at the August meeting.






“Following recent increases in inflation, pay is now clearly falling in real terms both including and excluding bonuses. Excluding bonuses, real pay is now dropping faster than at any time since records began in 2001.”

MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
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MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
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