Brits’ wages rise at the fastest rate in three years while unemployment drops by 55,000

WAGES are growing at their fastest rate for three years – as firms pay up to fill the biggest number of vacancies on record.

Unemployment dropped 55,000 in the three months to July to 1.36 million while pay growth was 2.9 per cent — its highest level since 2015.

The Office for National Statistics said vacancies hit 833,000 in July – the highest since current records began in 2001.

And they showed that earnings – excluding bonuses – in July were up 3.1 per cent on the same month last year.

Work and Pensions Secretary Esther McVey said the government was “transforming this country into a great working nation”.

But the British Chambers of Commerce warned of skills shortages and workers’ ability to keep up with inflation.

Experts warned Brits’ spending power was still “anaemic”.

But the Resolution Foundation said it appeared firms were having to offer more to find new recruits in sectors such as catering and hotels.

Unemployment fell by 55,000 in the three months to July to 1.36million – giving a jobless rate of 4 per cent. Employment crept up by 3,000 to 32.4million – meaning 75.5 per cent of the working age population are in work.

The British Chambers of Commerce warned that the “robust headline data” was masking concerns about skills shortages – and workers’ ability to keep up with the pace of inflation.

Suren Thiru, the BCC’s head of economics, said: “While there was a welcome increase in earnings growth, the gap between pay and price growth remains insufficient to convert into an appreciable pick-up in consumer spending.

“Sustaining meaningful real wage growth is likely to remain challenging amid subdued productivity and the escalating burden of upfront costs on businesses.”

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