Real pay rises at fastest rate since 2021

Real pay in the UK has risen at its fastest rate for more than three years on average, driven by powerful wage growth in the private sector.

After bookkeeping for the impact of worth rise, pay packets increased on average by 3.4% on the year.

Growth in private sector profits were stronger than wages for community sector jobs between September and November, according to the Office for National Statistics (ONS), compared with the same period the year before.

Despite a uncertainty of higher wages pushing up worth rise, the financial institution of England is still expected to cut gain rates next month.

Rates are currently at 4.75%, but traders have bet on a cut to 4.5% in February, after worth rise, which measures the rate prices rise at over period, unexpectedly fell last month.

Liz McKeown, director of economic statistics at the ONS, said pay growth had picked up for the second consecutive period, “again driven by powerful increases in the private sector”.

Regular pay increased by an annual average of 5.6%, but when taking into account worth rise, the real wage boost was 3.4%.