UK wages up 1.8% in real terms

Pay growth for UK employees has slowed again but is still outpacing inflation, new figures show.

In October to December 2023, annual growth in employees’ average regular earnings (excluding bonuses) was 6.2%. Including bonuses, earnings grew by 5.8%, the Office for National Statistics (ONS) said.

The increase in wages is smaller than in previous periods but remains above the rate of overall price rises, increasing households’ spending power.

When the figures are adjusted for inflation, regular pay rose on the year by 1.8% and total pay was up 1.4%.

Elsewhere, the monthly data showed a drop in the unemployment rate to 3.8% in the last three months of 2023, and growing employment.

But the figures also reveal that there are historically high numbers of people reporting they are long-term sick and unable to work.

The estimated number of job vacancies fell by 26,000 on the quarter to 932,000.

“Job vacancies fell again, for the 19th consecutive month,” said ONS director of economic statistics Liz McKeown. “However, there are signs this trend may now be slowing.”

Vacancies remain above pre-pandemic levels.