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Wage growth overtakes inflation for first time in five years


The Office of National Statistics (ONS) has revealed new figures that show growth in average pay for workers has overtaken inflation rates in the UK.

Wages, excluding bonuses, have risen by 1.3% in the year to September, and the inflation rate has only risen to 1.2%. This is the first time in five years that inflation has fallen behind growth in average pay. Wage growth including bonuses was 1%.

The deputy governor of the Bank of England said he expected real earnings to continue outpacing inflation well into next year.

The government has claimed this shows how economic recovery is trickling down into UK households, but some experts believe it will take years for earnings to return to pre-crisis levels.

The level of unemployment also fell by 115,000 for the 18th consecutive month, to 1.96 million. The number of people claiming Jobseeker's Allowance was 931,700 in October which is 20,400 less than September, and the 24th consecutive monthly decrease.

Employment Minister Esther McVey said:
"Record numbers of people in work means more people with the security of a regular wage who are better able to support themselves and their families.

"With the vast majority of the rise in employment over the last year being full-time, it's clear that thanks to the government's long-term economic plan, we are helping businesses to create the jobs that people need."

Paul Kenny, general secretary of the GMB union, said:

"Many of the new jobs are precarious and badly paid while the real value of take-home pay for the rest of the workforce is 13% below pre-recession levels."

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