Data published by the Office for National Statistics (ONS) has revealed that UK wage growth increased to 2.6% during the three months to January – representing the fastest rate of growth since September 2015.
Experts are debating as to whether the latest figures will incentivise the Monetary Policy Committee (MPC) to raise interest rates in May.
Commenting on the wage growth figures, the Resolution Foundation warned that average pay is ‘still lower than it was a decade ago’. Stephen Clarke, Senior Economic Analyst at the Resolution Foundation, said: ‘While it’s a relief that pay packets are no longer shrinking, the outlook for anaemic pay growth remains a huge living standards concern.’
The publication of the wage growth figures follows news that the UK’s rate of inflation fell from 3% to 2.7% during February. Lower prices for petrol played a key role in reducing the figure, the ONS said.
Mel Stride, Financial Secretary to the Treasury, said: ‘We know families feel the cost of living at the end of every working week.
‘We are increasing the National Living Wage, which is already helping the lowest earners see their pay rise by almost 7% above inflation.’