London salaries start to show signs of growth after two "stagnant" years

Catherine Neilan
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The Chancellor Today Gives His Last Pre Budget Report Before The Election
Wage growth is still not keeping up with inflation, though (Source: Getty)

Salaries in London are beginning to show signs of recovery, a new report suggests, with a 0.2 per cent rise for the year to June 2017 - the first annual increase since July 2015.

That's according to Adzuna's latest job report, which also found that advertised vacancies are at a 19-month high.

The jobs site claims that UK companies scaled back recruitment because of uncertainty around the EU referendum, with salaries "stagnant" for the past two years.

It noted that workers were still feeling the pinch and "forced to be shrewder with spending power" as inflation continues to outpace wage growth. In June consumer prices rose 2.6 per cent, though this was dampened on the previous month by a fall in fuel costs.

And the latest IHS Markit Household Finance Index suggests willingness to make big purchases has fallen to its lowest level since December 2013 as consumers are less prepared to spend money on luxury items such as holidays.

The average London salary has risen to £39,232 - however workers in South East England have suffered a 2.3 per cent year-on-year decrease, with advertised salaries dropping to an average of £30,986.

Doug Monro, co-founder of Adzuna, said: “Although salary growth remains stagnant in most regions, it is encouraging to see London join Eastern England, Northern Ireland and Wales as an area where the green shoots of recovery are visible.

“Recent warnings suggest that the UK may be on track for an economic slowdown, but it is hoped that a clear-cut immigration strategy is to become the backbone of the UK economy. With vacancies on the rise, this calls for further investment into new and innovative sectors that will stimulate the economy and boost wage growth.

"Recent announcements from BMW and Amazon provide a further shot in the arm for the UK jobs market and could well motivate other blue-chip companies to follow suit.”

After conflicting messages from within government, yesterday Downing Street confirmed that freedom of movement would end from March 2019, however business leaders have warned the move could have a knock-on effect on the wider economy.

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