13 June 2023
If you are covering the latest UK labour market statistics, please see the following comment from Rosie Hooper, chartered financial planner at Quilter:
“The latest ONS data show that wages continue to rise, but despite this workers are still 2% worse off in real terms due to persistently high inflation in the UK. The continued rise in wages, fuelled by private sector wage growth, will increase pressure on the Bank of England to up interest rates again next week.
“There remains a sizeable gap between the pay increase in the public sector compared to the private sector. Average regular pay growth for the private sector was 7.6% versus 5.6% in the public sector. The labour market on the whole remains very tight, but there are signs it is cooling with the jobless rate increasing once again.
“Continued strong pay growth is a consequence, rather than a cause, of high inflation. However while inflation has fallen from its stubborn double-digit highs for the first time in seven months, it remains eye-wateringly high, preventing many workers from fully benefiting from a boost to their income through pay increases. If you take inflation into account, total pay (including bonuses) and regular pay fell by 2% and 1.3% on the year as price rises strip away at households’ buying power.
“With the cost-of-living crisis still raging on and wages struggling to keep up, it remains a critical time for thorough planning of your finances to both build and protect wealth. There are many opportunities to maximise the use of tax benefits, from childcare support offerings to investing across different assets using your ISA and pension allowances to best the erosion of holding cash. Where possible, professional financial advice should be sought to help you navigate these challenging, turbulent times.”
