UK pay growth slows as Iran war prompts cost of living squeeze
Summary
Wage growth in the UK slowed slightly in June, as workers face higher living costs partly due to economic effects from the war in Iran. Inflation is rising because of increased energy prices, which is putting financial pressure on households despite some signs of stability in the job market.Key Facts
- UK average wage growth, including bonuses, fell from 4.3% to 4.1% in the three months to June.
- Regular wage growth stayed mostly stable, with private sector pay growth easing but public sector pay growth remaining high because of NHS pay awards.
- Pay growth excluding bonuses increased slightly from 3.4% to 3.5%.
- The number of workers on company payrolls dropped by 13,000 in July, a smaller decline than before.
- Job vacancies fell, and unemployment stayed at 4.9%, higher than economists predicted.
- Inflation in the UK is expected to rise near 3% due to increased energy bills caused by the Middle East conflict.
- Annual earnings growth after inflation was 1.3% in the three months to June, showing workers’ pay rises are being partly wiped out by inflation.
- The government is working on measures to help households with the cost of living and youth employment, including reforms to welfare and support for young job seekers.
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