Edinburgh wages fail to match inflation despite UK real-terms pay steadying
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Wages in Edinburgh failed to keep up with inflation, despite real-terms pay in the UK steadying, new figures show.
The Office for National Statistics said total pay including bonuses in the UK jumped by 8.5 per cent and outstripped inflation for the first time since March 2022. However, experts said only some sectors, such as business and finance, have benefited, while low-paid workers in industries like retail and transport continue to see their wages fall short of inflation.
ONS figures show the median wage including bonuses in Edinburgh saw just a 7.5 per cent increase in the three months to July – below Consumer Prices Index (CPI) inflation of 7.8 per cent over the same period. Median monthly pay in the area was £2,438 as of July – up from £2,291 the same month a year before.
Excluding bonuses, workers’ average weekly earnings across the country grew by 7.8 per cent in the three months to July – the highest increase since comparable records began in 2001.
Ben Harrison, director of the Work Foundation at Lancaster University, a think tank for improving working lives in the UK, said: “Pay growth this month is the highest on record and that may be good news for some workers, but it remains concentrated in typically high paying sectors such as business and finance.
“Many low-paid workers in sectors like retail and transport are continuing to see their wages fall short of inflation.”
While the pay rise across the UK comes as a relief to households struggling with the cost-of-living crisis, it is also likely to reinforce concerns among Bank of England policymakers over stubborn inflation and increase pressure to raise interest rates yet again as they battle to bring inflation back to the two per cent target.
Martin Beck, chief economic adviser to the EY Item Club, a UK economic forecasting group, said the bank is facing a “quandary”, with wage growth remaining at a record high, but the jobs market turning after 14 rate rises in a row.
The latest figures released by the ONS this week show the unemployment rate in the UK surged to its highest level since July to September 2021, at 4.3 per cent in the three months to July. This was up from 4.2 per cent in the previous three months, as the number of unemployed people rose by 159,000 quarter-on-quarter to 1.5 million.
In Scotland, unemployment rose by 1.3 per cent in the three months to July, compared to the same period last year, meaning 4.3 per cent of people were out of work across the country.
Darren Morgan, ONS director of economic statistics, said: “The proportion of people neither working nor looking for a job is slightly up, with more students, as well as the long-term sick reaching yet another record.”