Inflation adjusted earnings growth eases

Annual growth in regular earnings (excluding bonuses) was 6.0%, and annual growth in employees’ average total earnings (including bonuses) was 5.7%.

Annual growth in real terms (adjusted for inflation using the Consumer Prices Index including owner occupiers’ housing costs (CPIH)) for regular pay was 2.0%, and for total pay was 1.7%.

Annual average regular earnings growth for the public sector remains strong at 6.3%; for the private sector, this was 5.9%, with growth last lower than this in April to June 2022 (5.4%).

Both the manufacturing sector and the finance and business services sector saw the largest annual regular growth rate at 6.8%.

Payrolled employees in the UK fell by 5,000 (0.0%) between February and March 2024, but rose by 288,000 (1.0%) between March 2023 and March 2024.

The early estimate of payrolled employees for April 2024 decreased by 85,000 (0.3%) on the month but increased by 129,000 (0.4%) on the year, to 30.2 million. The April 2024 estimate should be treated as a provisional estimate and is likely to be revised when more data are received next month.

Melanie Pizzey, CEO and Founder of the Global Payroll Association, said, “While last month’s earnings figures were more positive than expected, they did sparked fears that it could delay a rate cut from the Bank of England and low and behold we saw a sixth consecutive hold on rates just last week.

However, while today’s figures show that earnings growth excluding bonuses has remained unchanged, there has been a marginal reduction in growth once adjusting for inflation and so the prospect of a summer rate cut remains promising, providing inflation continues to fall close to the target level of two percent.

This will bring hope to households across the nation who may have enjoyed some respite in the form of a pay rise, but continue to struggle with the far higher cost of living spurred by interest rate hikes over the last two and a half years.

While unemployment statistics remain an unreliable gauge of market strength, provisional figures with regard to payrolled employee numbers show that there have been marginal declines suggesting a further weakening in the labour market.”