UK economy

British wages rise but lag inflation

PUBLISHED : Monday, 21 October, 2013, 3:23pm
UPDATED : Monday, 21 October, 2013, 3:23pm

Britons’ incomes edged up for the first time in three months in October as the labour market strengthened, although pay growth still lagged far behind inflation, a survey showed on Monday.

An index measuring the change in income from employment compared with the previous month rose to 50.6 from 49.5 in September, just topping the neutral level of 50, according to the poll by financial data firm Markit.

Unemployment in Britain has fallen in recent months as the economy has gained speed, and workers’ worries about losing their jobs have eased.

Markit’s job security index slipped only slightly to 46 in October from September, when it hit its highest since Markit began the survey in February 2009.

Finance and business services professionals felt the most confident about their jobs, followed by construction workers.

“Households reported another rise in workplace activity, suggesting that UK economic conditions continued to improve at the start of the fourth quarter,” said Markit economist Tim Moore.

“However, signs of an outright improvement in financial well-being are thin on the ground as incomes continue to lag behind living costs.”

The index measuring current inflation perceptions reached 82.5, its highest since July, while the gauge of expected living costs in 12 months’ time hit 92.4, the highest since April.

Both indicated much faster growth in prices than in incomes.

Some 1,500 people were interviewed for Markit from October 10 to October 14.