UNEMPLOYMENT plunged to its lowest level since 2008 in the three months to July, official figures showed yesterday, as the job market’s rapid recovery signals higher wages could be just around the corner.
Joblessness dived at the fastest pace in 25 years in the year to August, falling to 6.2 per cent.
Meanwhile, employment jumped 774,000 on the year to 30.61m.
However, wages increased by just 0.7 per cent, firmly below the 1.5 per cent rise in prices.
Such poor real pay growth indicates there may still be further room for hiring before wages pick up and start to push upwards on prices.
Firms reporting to the Bank of England’s survey of business conditions also said they were looking to keep recruiting over the next six months, again indicating there is some slack in the market.
“We expect earnings growth to gradually trend up over the coming months, with the gains accelerating as 2015 progresses – as sustained decent economic growth, easing slack in the labour market and optimism in the outlook causes a growing number of employers to lift pay” said Howard Archer, economist at IHS Global Insight.