Private sector wages and total pay, including bonuses, surpassed inflation despite a surprise rise in the rate of UK unemployment.
Economists thought the unemployment rate would remain at the 4% level recorded last month but it has now gone up to 4.2%.
Wages have also risen again with private sector wage growth increasing to 8.2% and pay, including bonuses, also reaching 8.2%, above the rate of inflation. The result is more money in the pockets of private sector workers.
Average weekly earnings, excluding bonuses, hit an annual growth rate of 7.8% during the three months to June, surpassing the highest level on record – the 7.3% confirmed in last month’s release.
The growth, however, was outpaced by the rate of price rises, meaning an effective pay cut for workers.
The key measure of inflation (the consumer price index) stood at 7.9% in the year to June. Not since October 2021 has wage growth outpaced inflation.
Public sector wages increased by 6.2%, the highest since September to November 2001 when public sector pay increased by 5.7%.
On wages, Mr Bailey has said they are “not consistent currently with the 2% target, because we’re not at the 2% target at the moment”.
“It’s going to need to come down.”
Latest figures will pile pressure on the Bank to continue its rate rising programme, making borrowing more expensive as a result.