For the first time since 2009 wages have outpaced inflation according to the Office for National Statistics. This could signal the end to one of the toughest economic climates in living memory. Pay increased by 1.3pc in in the three months up to September compared to the same period in 2013. Price inflation currently sits at 1.2pc so whilst the margin is small it is a sign that the economy is turning itself around.
This change is welcome relief to families across the UK although the easing pinch won’t be really be felt until next year when pay growth accelerates to vastly outstrip inflation, according to the Bank of England. Rob Wood, the chief UK economist at Berenberg Bank, said: "There are very tentative signs of some improvement in wage growth." He went on to caution that month-to-month figures weren’t consistent and caution should be advised. However with inflation likely to remain weak and indications of a slowdown in the Eurozone economists suggest that interest rates will not rise in the next few months.
Separate figures showed that an extra 112,000 jobs were created in the three months to the end of September. This was slightly fewer than had been expected and meant that the overall unemployment rate in the UK remained at 6pc rather than falling to 5.9pc as had been forecast.
Andrew Little, Electus Recruitment’s Client Development Director, commented:
“It’s encouraging to see salaries rising and the wider implications surrounding the economy as a whole. With the quickening growth across our specialisms and emerging markets, particularly in engineering, we’re confident that this signals sustainable economic growth."